Steel Duties - Unintended Consequences

Dear Steel Industry Employer

The repercussions (without exception) of import duties are yet again glaringly illustrated by its introduction by president Donald Trump – as a result of his ‘America First’ policies.

His actions immediately caused certain reactions/consequences – although in Trump’s case it may be quite intentional:
• a number of countries asked for exemption – some got it (under certain conditions); others did not;
• China retaliated with higher duties on certain products imported from the US; and
• the European Union started safeguard investigations into US steel imports.

However, I wonder if Trump had foreseen that his duties on steel would have negatively affected the Copper Industry in the US – which is the case according to the latest news coming out of the US. The duties scenario can be compared to the ‘butterfly effect’ – a minor change at one end can have a massive consequence on the other end.

The ‘US vs the world’ scenario has certain similarities with the duties introduced by the dti – in our case it was done in terms of the ‘AMSA first’ policy – to the detriment of the Steel Downstream and our trading partners. In our case all arguments against duties fell on deaf ears.

The difference between the ‘US vs the world’ and the ‘AMSA vs the SA Steel Downstream’ is the following:
• the SA Steel Downstream does not have the power to retaliate; and
• neither does it have the power to negotiate.

The Steel Downstream’s fate, in this regard, is left in the hands of the dti who is committed to protect AMSA which, in many respects, has failed the Downstream.

The Downstream, however, is not going to approach the dti with extensive submissions; we are simply compelled to wait for the day when AMSA and the dti sees the light. This ‘revelation moment’ may come sooner than expected.

Kind regards

It has been said that something as small as the flutter of a butterfly’s wing can ultimately cause a typhoon halfway around the world.
EDWARD LORENZ