ITAC Rejects Tariff Hike on Imported Paper Products

South Africa’s International Trade Administration Commission has rejected a proposed 20% tariff on imported paper products following an industry investigation. The regulatory decision spares downstream industries and consumers from higher costs while leaving local pulp and paper manufacturers facing ongoing structural market pressures.

Mondi and Sappi Push for Protection After Losses

The tariff investigation originated from requests by major domestic paper manufacturers Mondi and Sappi. Mondi flagged that cheaper international imports threatened local operations, while Sappi reported a R2.77 billion loss in its last financial year. Sappi CEO Steve Binnie stated that incoming products continued to create challenges for local makers and deserved greater policy attention.

Profitability continued to be impacted by intense competition from low-priced imports, which placed significant pressure on selling prices.

Sappi

Minister of Trade, Industry, and Competition Parks Tau formally requested the investigation after industry stakeholders reported severe strain across uncoated paper, newsprint, packaging, and tissue segments. Rising electricity and transportation expenses were compounding difficulties for producers in a sector where R33 billion has been invested over the past seven years.

Trade Commission Rules Against Customs Duty Increase

In a government gazette notice, the International Trade Administration Commission recommended keeping customs duties unchanged. The commission determined that most imported paper originated in the European Union under preferential trade agreements, meaning a general tariff hike would fail to target the actual source of competition.

Instead of restricting imports, the commission pointed to digitisation, changing consumer behaviour, and weak economic growth as the primary drivers of long-term decline in the domestic market. Regulators suggested that trade-remedy instruments like anti-dumping duties could serve as more appropriate tools if specific evidence of injurious competition arises later.

Market Investigation Ordered by Minister Tau

While approving the commission’s recommendation against the 20% tariff, Minister Tau directed regulators to initiate a broad market investigation into the domestic paper industry. The inquiry will evaluate appropriate trade policy instruments intended to support the sector’s long-term sustainability and resilience.