US steel and aluminium tariffs, Solidarity announces action plan

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Aluminium smelter (photo for illustration purposes only.)

Fear of job losses in the SA industry

Trade union Solidarity today announced its action plan in response to the decision by the US that the South African steel and aluminium industry would not be exempted from import tariffs on steel and aluminium.

This follows after the Trump administration’s announcement on 8 March 2018 that the USA, in the interest of national security, will introduce import tariffs on all imports of steel and aluminium to the USA.

According to Solidarity’s Deputy General Secretary for the Metal and Engineering Industry Marius Croucamp, the 25% import tariff on steel and the 10% tariff on aluminium came into effect on 23 March 2018. Canada, Mexico, Argentina, Australia, Brazil, the European Union and South Korea are exempted from the tariffs with certain conditions.

Croucamp added that the impact of the tariffs on the South African steel and aluminium industry was a real cause for concern. “We are concerned that the tariffs will result in many job losses in the local industry. The South African steel and aluminium industry has been under pressure for a number of years due to international and local market conditions as well as the dumpling of steel,” Croucamp said.

Local manufacturers affected by the new tariffs include ArcelorMittal, South32, Hulamin, Duferco, Cisco and Columbus Stainless. According to Croucamp, the South African government failed to convince the US authorities to that the local industry should be exempted from the import tariffs. “This means that the products of local companies exporting steel and aluminium to the US have become much more expensive in the US, and therefore companies in the US will be forced to search for cheaper alternative suppliers. One of the consequences of the import tariffs is that stock levels on the global market have risen even further despite an already existing oversupply,” Croucamp said.

Croucamp said that although China seemed to be the target of these import tariffs, South Africa also came into the firing line. “South African companies are not guilty of dumping practices in the USA,” Croucamp said. There is a possibility that the actions of the South Africa government at the United Nations have sparked the US decision. In a recent report by the US Department of State entitled Voting Practices in the United Nations 2017, South Africa has been identified as one of the member countries least likely to vote with the US in the UN. South Africa also has close trade relations with China as part of the BRICS countries.

Solidarity’s action plan is as follows:

  1. Solidarity will continue to engage with the South African government and industry players in support of the South African steel and aluminium industry to help ensure the sustainability of the industry, thereby offering protection to workers and protecting jobs. Solidarity’s SOS Campaign (Save Our Steel), which was launched in 2017, will serve as vehicle for the ongoing engagement.

 

  1. Solidarity will lend its support to and collaborate with the Department of Trade and Industry in further efforts to convince authorities in the USA to exempt the South African steel and aluminium industry from the tariffs.

 

  1. Solidarity will support local as well as US steel and aluminium companies that are involved in exports to the US when submitting exemption applications to US authorities.

 

  1. Solidarity is engaging with US representatives in South Africa with the aim of gaining a better understanding of the motives for not granting exemption to the South African steel and aluminium industry. It is important that Solidarity, too, exercises its influence in a bid to convince US authorities to revise the decision on tariffs. Moreover, Solidarity wants to build ties and strengthen relationships.

 

  1. Solidarity intends to submit a petition to the Trump administration requesting that the US decision not to grant exemption to the South African steel and aluminium industry be revisited and that such request be favourably met.

 

  1. Solidarity will liaise with key organisations in the US steel and aluminium industry that were involved in the 232 investigations to advance the cause of exempting the South African steel and aluminium industry from import tariffs.

 

  1. Solidarity is drafting a contingency plan to deal with the possibility of job losses in South Africa as a result of the imposition of the steel and aluminium tariffs. Such plan will detail how support could be given to affected members and employees.

Last week, Solidarity together with other key players in the industry met with Trade and Industry Minister Dr Rob Davis and officials from the Department of Trade and Industry. Important feedback was given at the meeting. Solidarity has also been in touch with representatives of US authorities.

“Solidarity will do everything possible to help ensure the sustainability of the local steel and aluminium industry and to try to prevent job losses,” Croucamp summarised.