South Africa’s steel industry has received a temporary tariff shield against Chinese imports, but economists warn the move could also increase costs for manufacturers and consumers across the economy.
The International Trade Administration Commission of South Africa (ITAC) has imposed provisional anti-dumping duty measures of up to 28.11% on colour-coated steel imported from China following an application by ArcelorMittal South Africa, which alleged that Chinese producers were dumping the product into the Southern African Customs Union (SACU) market.
The provisional measures, which were implemented by the South African Revenue Service (SARS) on 28 August 2026, will remain in place for six months.
ITAC said its preliminary investigation found that the subject product originating in or imported from China was being dumped onto the SACU market, causing material injury and posing a threat of further material injury to the local industry.
Colour-coated steel is widely used in sectors including appliances, construction and automotive manufacturing, making the tariff potentially significant beyond the steel industry itself.
Independent economist Ulrich Joubert said the tariff highlighted the difficult balance between protecting domestic producers and keeping input costs under control.
“There are always two sides to an import tariff,” Joubert said, arguing that a duty of this magnitude could make the product substantially more expensive for domestic users, whether they are consumers, retailers or manufacturers.
He also warned that higher steel prices could feed through into inflation, particularly if businesses pass increased input costs on to customers.
Joubert noted that in the long term the imports could have a negative impact on the consumer. “We have seen it with other countries when local producers stop producing because they are making a loss and the exporter then increases the price which will negatively impact the local consumer. Unfortunately it does undermine the local manufacturer in the local market
The case for the tariff, however, centres on the longer-term sustainability of South Africa’s industrial base.
Professor Simphiwe Madikizela, senior lecturer in economics at the University of South Africa’s School of Graduate Business and Leadership, said the provisional duty should be viewed as an intervention aimed at preserving domestic industrial capacity rather than simply protecting an individual producer.
“The imposition of provisional anti-dumping duties of up to 28.11% on colour-coated steel imports from China is an important intervention for the sustainability of South Africa’s steel industry,” Madikizela said.
He said the strategic importance of the steel industry extended well beyond steel mills because of its extensive links with construction, automotive manufacturing, appliances, engineering and other industrial activities.
Madikizela said the provisional duty could give local producers breathing room by reducing the price advantage enjoyed by dumped imports. This could help producers defend market share, maintain production capacity and support investment and employment across the steel value chain.
However, he cautioned that the measure also carried risks for downstream industries.
Manufacturers that rely on colour-coated steel as an input could face higher costs if locally produced alternatives are not available at competitive prices. Those costs could ultimately be reflected in the prices of roofing products, appliances and other components.
“The debate therefore centres on whether the temporary protection will give South Africa’s steel industry enough time to become more competitive, or whether it will simply shift higher costs further down the manufacturing chain,” he said.
Madikizela said the objective should not be permanent protection, but rather to use the breathing space created by the provisional measure to encourage modernisation, investment and productivity improvements.
The fact that the tariff is provisional is significant. “ITAC has yet to complete its investigation and is inviting interested parties to submit written comments on its preliminary findings within 14 days of the release of the preliminary report,’ he said.
Madikizela concluded that the measure is therefore justified as a short-term intervention against unfairly priced imports, but it must be accompanied by a longer-term strategy to make South African steel production globally competitive. ‘The real objective should be to protect and rebuild productive capacity, not to protect inefficiency.”
ArcelorMittal South Africa, which lodged the application that triggered the investigation, was approached for comment but said it could not comment on the matter at this stage.
yogashen.pillay@nationalmg.co.za