AMSA vs the Steel Downstream: The ultimate arrogance: AMSA NOT BOTHERED BY EXPIRY OF SAFEGUARD DUTIES

AMSA vs the STEEL DOWNSTREAM

The ultimate arrogance

AMSA NOT BOTHERED BY EXPIRY OF SAFEGUARD DUTIES

by Gerhard Papenfus

Dear Steel Industry employer

AMSA is not concerned about the lapsing of the safeguard duties at the end of August this year. They cite imports from countries that are not covered by the safeguard duties, as the reason for their indifference.

What AMSA is saying is that safeguard duties do not apply to countries like Russia and the European Union from which the South African downstream can import without paying safeguard duties, which then mitigates the impact of the expiry of the safeguard duties this month. AMSA is trying to downplay the extreme benefits they enjoyed as a result of the imposing of the safeguard duties during the last four years:

• China, who manufactures more than half of the world’s steel at the most competitive prices, was not exempted from safeguard duties and the downstream was therefore denied access to cheaper raw material; and
• the re-rollers, who competed with AMSA, were immediately eliminated since they imported their raw material from countries that were affected by the safeguard duties. The expiry of the safeguards merely mitigates the re-rollers plea to again compete with AMSA, since they are still subject to the 10 percent ad valorem duty.

The safeguard duties on hot-rolled coil would have expired in August 2020, but it was unlawfully extended by Government for another year – until 10 August 2021. This decision by Government was challenged by Macsteel in the High Court and an out-of-court settlement resulted in the 8 percent safeguard duty expiring this month. (The 8 percent safeguard duty is on top of the 10 percent ad valorem duty, bringing the total duty payable on hot-rolled coil to 18 percent).

Therefore, if the application of safeguards was never such a big deal for AMSA, why did they fight so hard to get it in the first place, then to maintain it and even to extend its lifespan?; they even supported Government in the recent matter against Macsteel, as mentioned above.

AMSA’s indifference about the application of safeguards, merely emphasises the fact that the downstream’s interests are immaterial to AMSA; for them it is all about AMSA, even if it causes devastation for the downstream, and even when the application (or not) of safeguards, does not really matter. This is the ultimate form of industrial arrogance. Remember, AMSA is still pursuing even more duties on other products: duties on 9 new tariff codes on steel, that they do not even manufacture, as well as an application for 120 percent duty on certain structural steel.

The fact that Government protects AMSA, boosting their selfish conduct, to the detriment of the downstream, simply cannot be excused. It is time that Government, in the making and the execution of policy, scrap all remaining import duties.

Gerhard Papenfus is the Chief Executive of the National Employers’ Association of South Africa (NEASA).

For more information:

NEASA Media Department

media@neasa.co.za