True impact of economic fallout from US duties
Sassda has voiced serious concern following the recent imposition of an average 30% tariff by the United States on South African stainless steel exports. The matter was a key focus of our latest 60 Minutes with Stainless webinar, which featured prominent economist Dawie Roodt as the keynote speaker.
Roodt delivered a hard-hitting assessment of the impact of such measures, warning that tariffs, regardless of how they are framed, are “nothing more than taxes” that ultimately burden the consumer and distort market dynamics.
“There’s no such thing as a tariff that’s paid by the exporter,” he noted. “The cost is passed on, raising local prices, and although some producers may benefit in the short term, the long-term effect is reduced competitiveness and slower innovation.”
Roodt reiterated that global data supports a free-market approach governed by fair and transparent rules. “We need to be cautious of measures that claim to protect but instead entrench inefficiency.”
Political posturing or economic policy?
The recent US tariff hikes, which range from 0% to 50%, have been positioned by the US government as a response to its growing trade deficit. However, Roodt argued that the real driver is geopolitical leverage, not economic necessity. “This isn’t about South African exports threatening American industry,” he said. “It’s about the US using trade as a bargaining chip particularly in response to South Africa’s global alliances and positions on key policy issues like expropriation.”
Roodt warned that unless South Africa presents a more neutral and economically stable image on the world stage, the country could face further punitive measures. “Tariffs are only one stick in the diplomatic arsenal,” he cautioned. “Others could follow.”
Structural Reform: A local imperative
At a national level, Roodt highlighted the ongoing structural weaknesses in South Africa’s economy, from sluggish growth to poor policy implementation and investor uncertainty, noting that these must be urgently addressed if the country is to remain competitive globally.
He called for a clear repositioning of South Africa as a reliable, politically neutral trading partner, adding that inward-looking legislation and inconsistent policies only serve to alienate the very allies we need.
Manufacturing must modernise
Turning to the industrial landscape, Roodt emphasised that manufacturers including those in the stainless steel sector must embrace new global realities, including the integration of technology and services.
“Modern manufacturing is no longer just about producing a product,” he said. “It’s about combining value-added services, smart systems, and skills. Fabricators need to start thinking like tech companies.”
He warned that without innovation, local players risk shrinking margins in the face of global oversupply, automation, and volatile commodity markets.
The role of the region
While opportunities such as the African Continental Free Trade Area (AfCFTA) offer long-term potential, Roodt was clear that weak institutions, poor infrastructure, and lack of policy enforcement remain major obstacles.
“South Africa has a comparative advantage in manufacturing on the continent, but we won’t realise it unless we fix the fundamentals — property rights, governance, logistics, and cross-border cooperation.”
Targeted tariffs over blanket measures
As part of the webinar, Sassda also shared the findings of a recent member survey aimed at gauging views on the role of import tariffs in protecting the local industry.
Key takeaways included:
- More than 70% of respondents rejected blanket tariffs on all imported stainless steel, citing negative impacts on price, competition, and supply chain flexibility.
- Support increased for targeted tariffs on products from specific countries known for dumping or substandard imports.
- Over 80% of respondents import some or most of their stainless steel, highlighting the sector’s exposure to global trade.
- The survey covered the entire value chain, from mills to fabricators, distributors, and service providers.
- Responses were well-balanced across small, medium, and large enterprises, ensuring a representative industry view.
Sassda Executive Director Michel Basson said the results would shape the association’s engagement with policymakers and trade authorities. “Our members are not against protection but they are calling for smarter, more targeted interventions that are rooted in fairness and market realities,” he said. “We will continue advocating for rules-based trade that supports local capacity where it exists, without undermining competitiveness or quality.”
Basson also confirmed that Sassda is exploring targeted sectoral strategies, particularly in holloware and welded tube, where local producers have the capacity to deliver but are currently undercut by low-cost imports.