SA’s steel and aluminium industry is bracing for a new set of challenges after US President Donald Trump’s reintroduction of tariffs on all imports.
Monday’s order for 25% tariffs on both metals takes effect on March 4 2025 and is expected to place a further burden on a sector that is already battling various domestic and global pressures.
The Steel and Engineering Industries Federation of SA (Seifsa) expressed concern at the decision, emphasising the negative impact it will have on the industry.
“We are definitely not pleased about it, it will impact our sector that is already under severe strain from a number of global market dynamics and trade practices namely electricity and rail tariffs, levels of safeguard protection and the current lack of steel demand in the sector just to name a few, tough times definitely ahead,” Seifsa CEO Lucio Trentini said.
According to the SA Iron and Steel Institute (SaisiI), the country exported about 1.64-million tonnes of steel the US between 2015 and 2024. The largest single export category was so-called Sheets & Strip Galv Hot Dipped, which accounted for 965,774 tonnes, 106,209 tonnes of which were shipped just last year.
According to the Aluminium Federation of SA (AFSA), the country exported 204,172 tonnes of aluminium to the US in 2023, valued at $596,489 (R11m).
The latest move mirrors Trump’s controversial 2018 tariffs, which imposed a 25% duty on steel and a 10% duty on aluminium imports under section 232 of US trade law. The goal was and is to boost American domestic production, but the tariffs triggered global trade tensions with major US trade partners, in particular Canada and China.
The latest tariffs apply broadly to all foreign steel and aluminium imports, reigniting fears of trade disruptions. There is also speculation Trump is using the levies as a bargaining tactic. On signing the new tariffs order on Friday, Trump explicitly said he would be imposing more “retaliatory” tariffs on several other industries including pharmaceuticals and cars.
AFSA CEO Muzi Manzi said the US remains a crucial market for SA’s aluminium sector. However, he said if all countries currently subject to section 232 tariffs face the same 25% duty, the impact on SA aluminium exports may not be as severe as initially feared.
Manzi also raised concerns about the potential inflationary effects of tariffs in the US, which could lead to a decline in overall aluminium demand. Nevertheless, he remains optimistic that SA’s aluminium industry could pivot to other international markets if necessary.
“Global aluminium demand is very strong. Inasmuch as we do not see any negative impact on our industry, there is room for diversification of our export market. We have been able to export our production and have on occasions not been able to supply other potential markets due to capacity constraints. Based on our capability and the aluminium market dynamic, we would be able to divert our exports elsewhere,” he said.
“Besides, the prevailing SA Aluminium Industry Roadmap calls for increased downstream production and any challenges we encounter in the export market may as well be the much-needed impetus to accelerating the development of the local downstream industry.”
Manzi said AFSA is working closely with the government to strengthen the local aluminium industry’s competitiveness.
Meanwhile, shares of ArcelorMittal SA were trading just over 2% lower on the JSE after Trump's announcement.
The rand was 0.33% weaker at R18.4889/$ and has been hovering around 18.50/$ after the US froze aid to SA over the Expropriation Act, a move SA said was due to misinformation.
Gold hit a record, the dollar remained strong, and Hong Kong’s Hang Seng index reached a four-month peak as investors reacted to US trade policy changes and awaited comments from Federal Reserve chair Jerome Powell. Oil prices held onto recent gains.
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