- South Africa will not be exempt from US duties on imports of steel and aluminium
- These increased taxes will hurt the local steel and aluminium industry, which now has to pay duties for the first time ever
- The US also recently announced it planned to cut aid to countries like South Africa who vote against it at the United Nations
The United States of America, led by president Donald Trump, has lumped South Africa together with China in its latest global trade war.
On Tuesday the department of trade and industry announced that South Africa would no longer be exempted from painful taxes on its steel and aluminium exports to the US.
South Africa, unlike the European Union, Australia, South Korea, Mexico, Canada, Brazil and Argentina will have to pay import duties of 25% on steel and 10% on aluminium.
Briefly.co.za gathered that despite some intense lobbying effort by the South African government, we have not been granted exemption by Trump’s administration. South Africa have been lumped with countries like China, Brazil and Russia in having to pay these taxes.
Previously, South African exporters had free access to the US market under the African Growth and Opportunity Act (AGOA) which was launched by former president Bill Clinton. South African companies benefited hugely from this arrangement with around 6,700 products being exempt from duties.
Trump’s latest trade war cast doubts on whether AGOA will be renewed in 2025 and creates uncertainty in regards to future trade policy. Experts have warned this policy could lead to vehicle imports being targeted.
In the short term, the South African economy is likely to take a hit by the increased tariffs. The steel and aluminium industries are critical to the local economy, around 7,500 jobs are wholly dependent on exports to the US.
The US receives about 5% of South Africa’s steel and aluminium output.
The department of trade and industry (dti) said in a statement: “South Africa finds itself as collateral damage in the trade war of key global economies. 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.”
Trump also recently announced plans to cut aid to countries like South Africa as punishment for voting against it at the United Nations (UN). The US claims South Africa voted with it on only none occasions and against it 68 times.
"When we arrived at the UN last year, we said we would be taking names, and this list of voting records speaks for itself. President Trump wants to ensure that our foreign assistance dollars – the most generous in the world – always serve American interests, and we look forward to helping him see that the American people are no longer taken for granted," said US ambassador to the UN Nikki Haley.
Haley said voting figures placed South Africa in the bottom 10 of countries which supported US interests at the UN and she singled South Africa out along with North Korea and Cuba as countries with low voting coincidence with the US.
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