By Donald MacKay | May 27, 2021
These are known as set screws. I don’t why, because they are not sold in sets nor do they much resemble screws. More like a bolt with the fully shank threaded. These set screws currently attract a 30% normal customs duty, plus an additional 45.61% safeguard duty, taking the total duty liability up to 75.61%. This is a lot for an important basic product. I would even go so far as to say, if you are struggling to compete with imports attracting such a very large duty, then some boardroom introspection is probably in order.
The South African Iron and Steel Institute has applied, on behalf of the South African Fastener Manufacturers’ Association and its members, CBC Fasteners and Transvaal Pressed Nuts Bolts and Rivets (both a name and a catalogue of products, all in one), to extend the current safeguard duties by another 6 years.
Interested parties have until 10 June 2021 to respond.
SAISI is the very same body who applied, on behalf of ArcelorMittal, to illegally extend their safeguard duties on hot-rolled steel, by another 6 years. Illegally in the case of ArcelorMittal because the duty was automatically extended without the investigation having concluded. The investigation has still not concluded, yet the duties remain in place. This matter is being opposed and the court dates are set down for June 2021.
Set screws are obviously a far less crucial item for everyone except those people who need set screws. Like car manufacturers and a host of other industries. Not as much of an economic impact as hot-rolled steel, but not without consequence either.
Safeguards are meant to be instruments of temporary relief. They deal with fair trade, unlike anti-dumping applications for instance, and so are not meant to be a permanent or long term hinderance to trade. They are there to give the local industry breathing room, when imports have unexpectedly surged and are meant to reduce each year and be removed after 3 years. 3 years have been agreed by the members of the WTO as sufficient time for the domestic industry to make adjustments so that it can compete against imports.
Safeguard duties are not applied to developing countries, nor countries which accounted for less than 3% of the import volume for the original investigation period (July 2016 to June 2017). If these countries exceed 3% of the volume imported after the safeguard duties have been imposed, then ITAC can automatically remove them from the exemption list and they would attract the duty. This does not require an investigation, although ITAC has in the past, conducted investigations before removing a country. But then also have not and have removed countries without notice.
Trade has predictably shifted to countries which produce set screws and which do not attract the duty. This is normal and the mechanism to resolve this has been described above. This seems to be the primary concern of the applicants. They want the safeguard to be something it is not; they want blanket protection from import competition and it seems they are being accommodated.
Of course they don’t produce the full range of set screws required by the set screw consuming industry, which places an undue burden on those consumers. It makes them less competitive. SARS are opposed to creating rebates to allow these set screws to be imported without duty, because there are so many varieties not made locally and some of the differences are subtle. Still important, but subtle enough that policing this at the border poses challenges. Also SARS is a hungry beast which wants to be fed and so rebating the duties on something like set screws is not appealing at all, even though the duties should not be paid.
Don’t forget the deadline unless you want to be stuck with the safeguard duties for another 6 years.
Image by Hier und jetzt endet leider meine Reise auf Pixabay aber from Pixabay