The International Trade Administration Commission of South Africa (ITAC) has initiated a safeguard investigation into hot-rolled steel.
The applicant, the South African Iron & Steel Institute (SAISI), represents ArcelorMittal South Africa Limited (AMSA), the major producer of these products in the Southern African Customs Union (SACU). The investigation aims to address the surge in imports that has caused serious injury to the SACU industry.
The flat-rolled products of iron, non-alloy steel, or other alloy steel are imported under various tariff headings, including 7208.10, 7208.25, 7208.26, 7208.27, 7208.36, 7208.37, 7208.38, 7208.39, 7208.40, 7208.51, 7208.52, 7208.53, 7208.54, 7208.90, 7211.14, 7225.30, 7225.40, 7225.99, and 7226.99. The applicant alleges that importers have also used tariff subheadings 7211.13, 7211.19, and 7226.91 as loopholes to import hot-rolled products into the Southern African Customs Union (SACU). The Commission has decided to include these additional tariff subheadings iff they impose safeguard measures to prevent potential loopholes. The like or directly competitive SACU product shares similar characteristics with the subject product.
The applicant alleges that the SACU industry is experiencing significant harm, causally linked to the recent surge in imports of the subject products. They allege that unforeseen developments have led to a surge in imports of hot-rolled steel products. These developments include:
China’s Economic Activity: China did not become a fully-fledged market economy as assured during Uruguay Round negotiations. The steep increase in crude steel and hot-rolled steel production capacity, mainly to support construction, automotive, and infrastructure growth, contributed to global oversupply.
Chinese Export Strategies: Chinese steel producers aggressively export due to excess capacity and economic slowdown. This imbalance led to increased exports from countries with excess capacity.
Reduced Prices: Chinese producers further increase exports at reduced prices to manage excess stocks.
Global Steel Industry Protection Measures: Countries worldwide are taking urgent actions to raise tariffs and implement trade remedies to safeguard their domestic steel industries. The Southern African Customs Union (SACU) is experiencing an import surge, which is expected to be exacerbated by China’s economic slowdown and shrinking export markets.
Trade Remedy Actions on Steel Products: Several countries, including the European Union, the United Kingdom, the United States, and Vietnam, are implementing trade remedy actions specifically targeting steel products, particularly hot-rolled steel. Hot-rolled steel, being a commodity product, can easily displace production in other regions due to excess capacity, potentially harming producers in those regions.