Experts question South Africa's steel tariff review deadlines

Banele Ginindza

Steel industry experts on Wednesday expressed scepticism about the deadlines set for the steel tariff review recently launched by the Department of Trade, Industry and Competition (Dtic), citing its vast scope and the far-reaching implications of its proposals.

On March 19, Itac  published a notice in the Government Gazette (notice no. 3061 of 2025) informing stakeholders of its intention to initiate the process of reviewing the steel tariff structure.

These include breaching the bound rate, introducing control pricing, imposing export duties, and invoking Article 19 of the World Trade Organisation (WTO) on tariffs and trade. They warn that such measures would drive up tariffs and prices, potentially leading to the collapse of numerous businesses within the sector.

Concerns by the sector are that the current review, covering four chapters of a range of primary products, was the most extensive done yet but with a short deadline of July for the International Trade Administration Commission (Itac) to report back to the Minister.

Donald Mackay, the founder and CEO of XA Global Trade Advisors, said many of the issues should have been looked at in the last decade and were now being compressed into a few months, which would mean Itac would have to cut corners.

"On average, a tariff investigation takes 27 months at the most, some have been going on for five years, that is a typical investigation without all of this - there is massive political pressure to get all these things resolved. The Minister wants feedback by July, what that means I don’t know, I can’t see any prospects of this being wrapped up by July and a proper job being done," Mackay said.

He said precedents include a 2004 review of just Chapter 72, and that took 13 months from when the gazette was published to when the changes happened, and that was a fraction of the size of the current review, which is looking at 55 of the 609 tariff codes. "The risk of litigation is non-trivial here, there are companies that could go out of business with the wrong decision, whatever that may be, the decision has to be taken rationally, if it is pre-decided it would end up in court, nobody wants that," Mackay said.

Mackay said amongst the proposals made thus far, there were concerns about breaching the bound rate, which consists of specific commitments made by individual WTO member governments on specific products, the practice being for bound tariff rate agreements amongst countries rather than actually applied rates.

"It is the breach of the bound rate I am most worried about. It is an incredibly vague paragraph in the gazette but if implemented would potentially raise tariffs very high. Most of the Chapter 72 products are already very close to the bound rate," Mackay said.

He said Itac was also bound by legal limits from implementing provisional tariffs as there were no legal instruments at its disposal.

"Itac has to adjudicate under pressure, there are capacity constraints, companies have had to pay a lot of money and all of that. The risk of litigation is non-trivial here, there are companies that could go out of business with the wrong decision, whatever that may be, the decisions have to be taken rationally, if it is pre-decided, it would surely end up in court and would end up badly," Mackay said.

He said another consideration being given serious thought was simply to block cost at bound rates. The view seems to be that South Africa can invoke Article 19 of the General Agreement on Tariffs and Trade, though Mackay expressed doubt about its legal permissibility.

"I am incredibly nervous of a trend being set when it becomes a norm that we can bypass our own legislation to achieve economic goals. The commitments under the WTO in the customs act is because they generally deliver better economic outcomes than if you don’t. Obviously there are moments where you can’t bypass it can arbitrarily, if we take a Trump approach it will be easier to lobby to bypass policy rather than to comply with the rules, the winner in short term is loser in long term. It is a slippery slope," Mackay said.

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