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.
South Africa’s steel industry is once again at the centre of the country’s trade policy debate. Recent tariff increases, anti-dumping investigations, safeguard applications and calls for stronger import enforcement all point to the same reality: South Africa is trying to preserve strategic industrial capacity in a market under severe pressure.
In May 2026, South Africa increased import duties on a range of steel products to between 10% and 30%, following ITAC recommendations aimed at protecting the domestic steel sector from rising imports and weak demand. Imports now reportedly account for about 36% of South African steel consumption, with China supplying approximately 73% of those imports.
But higher tariffs and trade remedies will only work if South Africa can properly identify where the steel was actually made. This is where the “melt and pour” rule becomes important.
The melt and pour rule identifies steel according to the country where the raw steel was first produced in liquid form in a steelmaking furnace and then poured into its first solid shape, such as a slab, billet, bloom or ingot. Canada’s official guidance explains that the country of melt and pour may be different from the ordinary country of origin.
That distinction is critical.
Under ordinary customs origin rules, a product may acquire origin in the country where it undergoes later processing, rolling, coating, cutting, forming or fabrication. However, in the steel sector, the real industrial value often lies at the steelmaking stage. If Chinese hot-rolled coil is sent to a third country, lightly processed into tubes, pipes, coated steel or structural sections, and then exported to South Africa as a product of that third country, the underlying steelmaking source may be obscured.
The result is simple: a trade remedy aimed at dumped or injurious steel from one country can be weakened if that steel is routed through another country before entering South Africa.
South Africa’s trade remedy system already uses duties, anti-dumping measures and safeguard investigations to protect local industry from unfair or injurious imports. But steel supply chains are fragmented. The country of export is not always the country where the steel was produced. The country of ordinary customs origin is not always the country responsible for the excess capacity, dumped pricing or subsidised steel input.
This creates a major enforcement risk.
A South African anti-dumping duty may apply to steel “originating in or imported from” a particular country. But if the same steel is melted and poured in that country, then moved through a third country for minor processing, importers may argue that the product has a different origin. The duty may remain technically valid, but commercially ineffective.
For South Africa, this is not an abstract concern. The country is dealing with rising steel import penetration, pressure on domestic producers, and increasing use of tariff and trade remedy instruments to stabilise the industry. If those remedies can be avoided through supply-chain restructuring, then the domestic industry receives relief on paper but not in the market.
A melt and pour rule would help close that gap.
South Africa would not be creating an unusual or extreme mechanism. Major trading partners are already introducing melt and pour requirements because ordinary origin rules are no longer enough for steel.
In the United States, a melt and pour requirement was introduced for steel products from Mexico under the Section 232 steel measures. Steel products of Mexico may remain free from Section 232 tariffs only if the steel was melted and poured in Mexico, Canada or the United States. If the steel was melted and poured outside those countries, the duty can apply. The US measure was expressly linked to limiting transshipment and discouraging excess steel capacity from undermining US trade measures.
In Canada, importers of applicable steel goods are required to report the country of melt and pour when using the Single Window Integrated Import Declaration. Canada implemented this requirement from 5 November 2024 as part of its steel import monitoring framework. The Canadian model is useful because it begins with transparency: importers must report the melt and pour country and retain supporting documents.
Canada’s guidance also shows that the rule is administratively workable. Melt and pour information may be supported by documents such as mill test certificates, material test certificates, certificates of conformance, metallurgical test reports, chemical analysis certificates, commercial invoices, heat numbers or mill codes.
The European Union is also moving in this direction. In May 2026, the European Parliament approved a new steel measure that introduces a melt and pour rule under which the origin of steel is determined by where it is first melted and cast. The stated purpose is to strengthen traceability and limit circumvention through minimal processing in third countries.
These examples show that melt and pour rules are becoming part of modern steel trade enforcement. The purpose is not to block legitimate trade. The purpose is to prevent trade measures from being defeated by artificial routing, minimal processing or paper-based origin changes.
