Safeguard protection is granted whenever an industry is suffering from serious financial injury, caused by an increase in imports, which was because of unforeseen developments stemming out of the 1994 GATT negotiations, to which South Africa was a signatory.
Safeguard measures are enacted to ensure enough breathing room for the domestic manufacturing industry in distress to adjust and become more competitive, usually within a period of 3-6 years.
For this remedial protection to be effective, these safeguard duties need to be monitored and enforced across the board. However, as part of the Safeguard Agreement, the Safeguard Regulations creates an “Exempted Countries” list. This exemption has shown to provide a safeguard duty-free roue for imports from countries which are developing in nature and from where imports did not originate prior to the imposition of the safeguard duties.
The” circumvention” becomes a problem when the bigger importers switch their sources from imports from the traditional exporting countries like China and Russia, to smaller, developing nations, like Taiwan and Indonesia, effectively bypassing the Safeguard duties in their entirety.
Other WTO member countries would normally act quickly against these changes by removing these “developing nations” quickly once its import volume exceeds the established threshold. No further investigation is required.
In South Africa, the remedial action linked to the imposition of safeguard measures are failing because the officer in charge of this administrative action, the Minister of Trade, Industry and Competition, Minister Dave Patel, fails in his duty to authorise these exempted country removals immediately, or at all in some cases. Imports that reduced because of the imposition of the safeguard duties, with a resultant uptick in local production, regained lost ground within a year of the duties being imposed, rendering the safeguard protection completely impotent.
Below is an import chart, providing insight on how imports of Hexagon Nuts, a product protected by safeguard duties have climbed to almost pre-safeguard levels, because of a lack of action by the government to curb imports from developing nations.
The South African Revenue Service (SARS) allows large-scale imports, such as entire industrial plants or construction projects, to be treated as staged consignments under a single duty-free tariff code. This "de-localisation" approach removes the need to apply duties to individual components and is designed to support major infrastructure development. However, a formal request has been submitted to SARS to exempt steel fasteners from this policy due to concerns over its negative impact on local manufacturers. SARS has acknowledged the concern and is currently conducting an internal consultation to assess the specific implications and respond accordingly.
Read more about stage conignments:
https://commoditytradeobserver.com/2025/07/07/staged-consignments-a-legal-loophole-undermining-local-industries/Following the March 14 2025 introduction of provisional anti-dumping duties on steel fasteners (tariff codes 7318.15.39 and 7318.15.43), widespread non-compliance has been reported, many importers have failed to pay these duties over the subsequent two-month period. This widespread issue strongly suggests a systemic problem with duty collection on SARS's part rather than isolated incidents of non-payment. The issue has been formally raised with SARS, and steps are being considered to recover the unpaid duties and ensure enforcement.
A growing import trend known as “country hopping” has emerged in response to the anti-dumping measures on steel fasteners from China. Importers are now routing goods through intermediary nations to sidestep duties and gain tariff advantages. This practice compromises the integrity of local trade protections and places domestic businesses at a competitive disadvantage.
SAFMA continues to engage actively with the International Trade Administration Commission (ITAC) as part of its review into South Africa’s steel and renewable energy sectors. Their submissions have spotlighted the challenges posed by import pressures, and SAFMA has also provided feedback on other stakeholders’ input to support balanced and effective trade remedies.
As part of the ongoing anti-dumping investigation into steel fasteners (tariff codes 7318.15.39 and 7318.15.43), SAFMA is preparing to respond to ITAC’s verification findings. Their objective is to rapidly address outcomes and ensure strong safeguards for domestic producers.
