market intelligence
3. Supporting Emerging Industries Developing economies sometimes use tariffs to protect start-up or sensitive industries. This raises import prices and encourages local production, with the goal of reducing unemployment and moving up the value chain. However, this strategy can be risky. Without competition, protected industries may produce poor-quality goods at higher prices. Subsidies to keep these industries afloat can also divert resources from more deserving sectors. 4. National Security Certain industries especially those related to defence - are considered strategically important. Developed countries often use tariffs to protect these sectors. 5. Retaliation Tariffs are sometimes used as a tool of retaliation. For instance, if France believes another country mislabels its local sparkling wine as “Champagne,” it might impose tariffs on goods from that country in response. Common Types of Tariffs and Trade Barriers Specific Tariffs A fixed fee charged per unit of an imported product. The amount may vary depending on the product type. Ad Valorem Tariffs A tariff based on a percentage of the product’s value. For example, a 10% ad valorem tariff on South African shoes sold in Japan would raise the price from R1 000 to R1 100 - making local Japanese shoes more competitive. Non-Tariff Barriers: • Licenses: Governments may require licenses for importing certain goods, restricting competition and driving up prices.
• Import Quotas: Limits on the volume of specific goods that can be imported. For example, the EU restricts imports of stainless steel primary products from South Africa. • Voluntary Export Restraints (VERs): An exporting country agrees often under pressure to limit exports. The importing country may reciprocate with similar restrictions. • Local Content Requirements: A rule that a certain percentage of a product must be made locally, either by component or by value. Where does Sassda stand on duties and trade tariffs? Sassda is recognised as the official voice of South Africa’s stainless steel value chain, representing members across the full spectrum of the industry. Many of these members also work with other metals, such as aluminium and carbon steel. Sassda’s mandate is to promote and grow local value addition to stainless steel, ensuring that competition between local and global suppliers benefits the domestic industry, its workforce, and the national economy. However, the impact of tariffs can vary widely across sectors. To ensure its stance accurately reflects the interests of its members, Sassda consults directly with them, often via surveys, to gather informed input before engaging with government departments. Good decisions depend on good information, and Sassda’s role is to gather that data and facilitate the process around applications, support, or objections to proposed tariffs. In 2025, Sassda is strengthening its ability to research and present market statistics, such as import and export data, in an unbiased, transparent way. While the association may not always take a side on specific tariff issues, it remains firmly committed to putting South Africa’s long-term industrial interests first.
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Issue 2 – 2025
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