market intelligence
Fair Trade or Foul Play? The Taxing Truth About Trade Tariffs Based on a large number of enquiries and understandable concern from our members, Sassda Executive Director Michel Basson unpacks the impact of tariffs and trade barriers on South Africa’s stainless steel value chain. What’s clear is that with input costs rising; global competition intensifying, and local industries under pressure, an economic battle is underway, and the role of duties and protective measures is under scrutiny like never before… What Are Tariffs? Why Are Tariffs and Trade Barriers Used?
Tariffs are a type of trade barrier that makes imported goods more expensive than local ones. Typically, they take the form of taxes or duties placed on imports, costs which are eventually passed on to consumers. Tariffs are commonly used as protectionist tools in international trade. Key points to remember: • Tariffs are a form of protectionist trade barrier applied in various ways. • They are paid by domestic consumers, not the exporting country. • Tariffs raise the relative prices of imported goods. • Other trade barriers include quotas, licensing, standardisation rules, and local content requirements . These tools also make foreign goods more expensive or harder to access, giving local products a competitive edge.
1. Protecting Local Jobs Tariffs can shield local industries from foreign competition. Without such protection, cheaper imports may force local businesses to cut jobs or move production abroad. While this may save jobs in the short term, it can harm long- term growth if local productivity doesn’t improve. Artificial protection often results in inefficient industries that can’t compete globally. 2. Protecting Consumers Governments may impose tariffs on products considered unsafe or hazardous. For example, a tariff on imported food could be introduced if there’s concern about contamination or disease.
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Issue 2 – 2025
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