U.S. Refuses South Africa Import Exemption Over ‘National Security’ Fears

The United States has imposed steel and aluminium tariff hikes on South Africa because it believes imports of these products could “impair” its national security.

The South African department of trade and industry (DTI) said Minister Rob Davies had written two submissions to his US counterparts arguing that South Africa should be exempt from the steel and aluminium tariff hikes partly because of the impact it would have on local jobs.

But on March 8, the DTI said, US President Donald Trump signed a proclamation that imposed a 10% ad valorem tariff on aluminum imports and a 25% ad valorem tariff on steel imports. The ad valorem tariff means that the duty is calculated as a percentage of the product’s value.

“The proclamation followed reports from the Secretary of Commerce that imports of these products threaten to impair United States of America (US) national security,” DTI spokesperson Sidwell Medupe said in a statement on Tuesday.

In February, the US commerce department recommended that Trump increase steel and aluminium tariffs because the imports of these products affect national security.

“[T]he Secretary of Commerce concludes that the present quantities and circumstance of steel imports are ‘weakening our internal economy’ and threaten to impair the national security as defined in Section 232,” the US commerce department said.

Section 232 in US trade legislation allows the president to impose tariff hikes to protect national security.

The US commerce department also recommended at the time that tariff hikes also be imposed on China, Hong Kong, Russia, Venezuela and Vietnam

Medupe says the US has granted exemptions to Canada, Mexico, European Union, South Korea, Australia, Argentina and Brazil, despite the fact that some of those countries amount for greater imports in the US than South Africa.

Collectively, he said, those nations accounted for 58% of total steel imports into the US in 2017, and 49% of aluminium imports in the same period.

The DTI says it is “disappointed” and “concerned” about how the US made its decision to not grant South Africa an exemption.

“South Africa is therefore not a cause of any national security concerns in the US nor a threat to US industry interests and is not the [cause] of the global steel glut. Instead, South Africa finds itself as collateral damage in the trade war of key global economies,” Medupe said.

“South Africa is concerned by the unfairness of the measures and that it is one of the countries that are singled out as a contributor to US national security concerns when its exports of aluminium and steel products are not that significant.”