ArcelorMittal South Africa, the largest steel producer on the African continent, continues to defend the use of trade protectionism measures, particularly import tariffs, amid growing criticism from industry experts and policymakers. The recent call for removing tariffs came from Donald MacKay, CEO of XA Global Trade Advisors, who argued that current industrial policies are outdated and harming economic activity. According to MacKay, trade protectionism in the scrap metal industry costs South Africa approximately R8.5 billion annually, without yielding substantial job creation benefits.
In response, Amsa’s group manager for stakeholder management and communications, Tami Didiza, emphasized that South Africa must focus on localisation and strengthening domestic supply chains to ensure economic resilience. Didiza warned that removing protectionist measures could lead to a further influx of cheaper steel imports, particularly from countries like China, where excess production capacity and economic downturns have led to steel being exported at lower prices. This, he said, puts immense pressure on local steel producers, including Amsa, and threatens jobs, production levels, and financial stability.
The influx of imported steel is a significant concern for the country’s steel sector, with imports currently accounting for 30% of South Africa's steel consumption, equating to about 1.3 million metric tons. Notably, more than half of these imports could be produced locally, presenting a substantial opportunity for the South African economy to strengthen its domestic manufacturing capacity.
In the past year, Amsa has also called for greater customs duty enforcement and for the immediate introduction of a carbon tax on imported goods. Didiza highlighted the importance of addressing underdeclared and missing imports, which create an unfair trade environment for local manufacturers. Furthermore, the company has supported a more robust approach to industrialisation, emphasizing the need to foster industries that depend on locally supplied steel, such as automotive, agriculture, and mining, to promote national economic growth and job creation.
Amsa's stance aligns with that of Ann Bernstein, executive director of the Centre for Development and Enterprise, who has advocated for the re-industrialisation of South Africa. Didiza noted that the world has shifted from a low-tariff era to one focused on protectionism and localisation, and South Africa must adapt to these changes to safeguard its industrial future.
Despite the push for tariff removal by some experts, Amsa remains firm in its position that tariffs are crucial for protecting local production capacity, job security, and long-term economic recovery.
