Government’s Massive Tariff Review Sparks Fears Over Jobs and Trade Stability

Key Takeaways

• The South African government’s decision to expand steel tariffs threatens jobs, raises costs, and hurts the industry
• Proposed import permits create red tape and grant excessive powers to the International Trade Administration Commission (ITAC)
• The Democratic Alliance (DA) calls for reforms that boost competitiveness and protect the economy
• The expansion of steel tariffs could lead to a "gatekeeping regime" that chokes supply chains, raises costs, and undermines the industrial base
• The DA urges stakeholders to make submissions before the 5 December deadline and for the government to abandon its current approach

Introduction to the Issue
The Democratic Alliance has expressed deep concern over the government’s decision to dramatically expand its steel tariff review, which could have far-reaching consequences for the industry. The proposed expansion would place an additional R10 billion worth of steel products at risk of new import permit requirements, affecting a wide range of businesses and individuals. The International Trade Administration Commission (ITAC) has added a further R8.9 billion of chapter 72 products and R1.2 billion of chapter 73 products to the contemplated import-control regime, giving it the power to decide whether South Africans may or may not import essential steel inputs.

The Impact on Industry and Economy
The proposed import permits are unworkable, economically destructive, and likely unlawful, according to trade experts. The DA is particularly alarmed by reports that permit applicants may be forced to justify why they are importing steel and disclose their pricing. If implemented as described, this would amount to a gatekeeping regime that will choke supply chains, raise costs, and undermine South Africa’s already fragile industrial base. The expansion of steel tariffs would lead to increased costs for manufacturers and households, ultimately threatening the competitiveness of the industry. The DA believes that South African industry needs competitive inputs, predictable policy, and government support for innovation, not politically driven protectionism that raises prices and destroys jobs.

Concerns Over the Permit Process
ITAC already struggles to issue permits in a timely manner, and adding thousands of new permits each year will create crippling delays, intensify red tape, and place up to 14,000 importers at risk. South Africa cannot afford a politically manufactured backlog that grinds manufacturing to a halt. The DA is also concerned about suggestions that ITAC may invoke Article 21 of the WTO’s General Agreement on Tariffs and Trade, a national-security provision, to declare a "security emergency" in the steel sector. This would give the executive sweeping and extraordinary powers to bypass normal investigative and consultative processes, raising concerns about the integrity of the process.

The Need for Reforms
The DA calls on all affected stakeholders to make submissions before the 5 December deadline and urges the government to abandon its reckless and heavy-handed approach. Instead, the government should focus on trade reforms that drive competitiveness, lower costs, and support genuine industrialization. The DA believes that the government should prioritize policies that promote innovation, competitiveness, and job creation, rather than relying on protectionist measures that harm the industry and the economy. Minister of Trade, Industry and Competition Parks Tau has indicated that he intends to implement parts of this review before the end of the year, even as consultations are still underway, which only deepens concerns about the integrity of the process.

Conclusion and Call to Action
In conclusion, the expansion of steel tariffs poses a significant threat to the industry, the economy, and the livelihoods of thousands of South Africans. The DA urges the government to reconsider its approach and instead focus on promoting competitiveness, innovation, and job creation. The government should prioritize the interests of the industry and the economy, rather than pursuing a misguided tariff crusade that threatens our economy, our exporters, and our global standing. The DA calls on all stakeholders to make their voices heard and to work together to promote a more competitive and prosperous South Africa. By abandoning its current approach and pursuing a more nuanced and evidence-based policy, the government can help to drive growth, create jobs, and promote a more sustainable and equitable economy.