In March 2016 Arcelor Mittal requested for a safeguard duty to be imposed on hot rolled steel products, classified under tariff headings 72.08, 7211.14, 7211.19, 7225.30, 7225.40, 7225.99, 7226.91 and 7226.99. A 12% safeguard duty was subsequently imposed on 11 August 2017.
The duty will drop to 10% from 10 August 2018 and drop again to 8% a later. On the 11th of August 2020, the safeguard will be completely removed.
The 12% safeguard duty was imposed in addition to the normal Customs duty of 10% currently in place on these tariff headings. The cumulative effect is that imported hot rolled steel products pay 22% in duties.
Investigation initiated to exempt some products from safeguard duties
On the 16th of March 2018, ITAC initiated an investigation to exempt certain hot rolled steel products from the existing 12% safeguard duty.
The products under investigation are those imported under rebate item 470.03 and drawback item 521.00 for use in the manufacture, processing, finishing, equipping or packing of goods exclusively for export
Reasons for the application
The application was brought by Robor and GasCon. As motivation for their application, it was indicated that:
- The safeguard has a negative impact on manufactured downstream steel exporting industries.
- The safeguard renders business uneconomical for export- oriented firms and may result in job losses.
Indeed, the current duties in place are significant and will potentially lead to loss of export competitiveness in downstream industries. Important to note is that, the downstream industry is not one thing. Rather there are many downstream industries and sectors impacted by the safeguard and the normal Customs duties.
Hot rolled steel is a primary raw material and so vital that manufacturers access the product at competitive prices. Failure to do so potentially leads to imports shifting from the primary raw material (hot rolled steel) to intermediate or finished products. Such a situation will be untenable as it will undoubtedly lead to loss of jobs and investment in the local economy.
Deadline for responses
Interested parties have until the 13th of April 2018 to respond to provide comments.
XA can assist downstream steel manufacturers. Mail us on email@example.com to find out more.