South Africa tariffs threaten Zimbabwe's steel boom

Published: 7 hours ago

Zimbabwe's fast-growing steel industry is facing fresh pressure after South Africa introduced sweeping new import duties on steel and downstream metal products, raising fears that the measures could undermine the country's industrial resurgence led by the massive Manhize steel plant.

When Dinson Iron and Steel Company (Disco) commissioned its US$1.5 billion Manhize plant in 2024, Zimbabwe dramatically reduced its dependence on imported steel, ending years of spending nearly half a billion US dollars annually on foreign supplies.

By the first quarter of 2026, Zimbabwe's steel export earnings had surged 254 percent to US$68.22 million, driven by growing regional demand for billets, rebars and wire rods, particularly from South Africa.

However, on May 15, 2026, South Africa introduced new tariffs ranging between 10 percent and 30 percent on imported steel and related metal products in what Pretoria described as a move to protect its struggling domestic steel industry from low-cost imports.

Industry observers say the tariffs come at a time when Zimbabwe is emerging as one of the region's most dynamic new steel suppliers.

Zimbabwe's steel export earnings reportedly jumped 450 percent in 2025 to US$92.1 million from exports of 146,314 tonnes, while ArcelorMittal South Africa posted losses of 3.355 billion rand and shut down some of its long-steel operations.

As South Africa's steel industry contracted, Zimbabwean producers moved into the gap, with South Africa's primary steel imports reaching a record 1.56 million tonnes in 2025. Imports of semi-finished products such as billets and blooms rose by more than 514 percent.

The Manhize operation has also been praised for its strong local supply chain, with about 98 percent of raw materials including coke, limestone and iron ore sourced domestically.

The new South African duties apply to a wide range of products, including flat-rolled steel, alloy steel, tubes, pipes, hand tools and fittings. Rebates will reportedly only be granted for products considered unavailable locally and will require approval from the International Trade Administration Commission.

Critics argue that the measures effectively create new trade barriers against Zimbabwean exports despite regional trade agreements under the Southern African Development Community (SADC) framework.

The dispute has also reignited debate over trade imbalances between the two neighbouring countries.

In 2025, Zimbabwe exported goods worth about US$526 million to South Africa, while South African exports to Zimbabwe totalled approximately US$4.3 billion, leaving Pretoria with a trade surplus of nearly US$3.8 billion.

South Africa's exports to Zimbabwe include mining machinery, cereals, vehicles, plastics and other manufactured products, many of which local industries believe could increasingly be produced domestically as Zimbabwe rebuilds its industrial base.

Zimbabwe has already started implementing local content and import substitution policies aimed at strengthening domestic manufacturing. Authorities say the country reduced imports from South Africa by about US$140 million in 2025 as local industries recovered.

Zimbabwe's Local Content Strategy, introduced in 2019, seeks to increase local content utilisation from 25 percent to 80 percent while boosting manufacturing capacity utilisation from 45 percent to 75 percent.

The Manhize steel project is expected to become one of Zimbabwe's largest industrial operations, employing more than 2,000 workers directly, with projections rising to 25,000 jobs at full production capacity.

The plant is also expected to contribute an estimated US$5 billion annually to the national economy.

Analysts say the unfolding steel dispute highlights growing tensions between regional industrialisation efforts and protectionist policies as African economies compete for manufacturing markets and investment opportunities.
- Mining Zimbabwe

Tags: Steel,