Egypt's steel industry is at a crossroads, with experts debating the impact of a 13% protective tariff on billet imports. The tariff, which came into effect on March 31, 2026, aims to protect local steel manufacturers from cheap imports. However, some argue that it will increase production costs and threaten the competitiveness of local companies. The tariff was imposed after an investigation by the Ministry of Investment and Foreign Trade found that imports were causing harm to local manufacturers.
The dispute over the tariff centers on the type of steel industry Egypt wants to build. Experts argue that the goal should be to maximize value-added production, utilize local production capacity, and reduce reliance on imports. However, others argue that the lower cost of imported raw materials, even if they are in surplus globally, should be the primary consideration. The tariff has sparked opposition from some manufacturers, who argue that it will make it difficult for them to export and will lead to job losses.
According to experts, the comparison between local and imported steel products should be based on real costs and fair competition, rather than just price. They argue that the 13% tariff is not an unusual measure, but rather a tool recognized internationally to correct import prices and align them with the natural cost of production. Many countries, including Pakistan, Canada, and Turkey, impose tariffs on steel products to protect their local industries.
The Turkish example is often cited, as it is a significant producer and exporter of steel. However, experts note that Turkey's industry is structured differently, with most of its factories being integrated or semi-integrated and producing billet locally. In contrast, Egypt's industry relies heavily on imported billet. Additionally, the cost of production in Egypt is significantly higher than in countries like Saudi Arabia, due to differences in gas prices and financing costs.
Dr. Alta El-Mahdi, former president of the Egyptian Iron and Steel Association, argues that the steel industry is not just a commercial issue, but also a matter of industrial policy and economic security. She believes that protecting the local steel industry from imported billet is necessary for national security reasons, as a strong industrial base requires basic industries like iron and steel.
El-Mahdi also notes that if a factory closes or production capacity is lost, it means losing investment, production capacity, jobs, and technical expertise. She argues that the cost of the decision should not just be based on the price difference, but also on the economic cost of losing the industry itself. Furthermore, she points out that European countries are not a suitable model for comparison, as they have a different industrial structure and do not rely heavily on imported billet.
The issue also raises concerns about product quality and safety. Experts argue that steel products are not just commodities, but also have a significant impact on public safety. They note that any problems with the quality of steel products can have serious consequences, and therefore, the industry must prioritize quality and safety. Ultimately, the goal is to create a level playing field for local manufacturers, while also ensuring that the industry is competitive and sustainable in the long term.
Key points
- Egypt's steel industry faces challenges due to a global surplus of steel production.
- A 13% protective tariff on billet imports aims to protect local manufacturers but has sparked opposition.
- Experts argue that the goal should be to maximize value-added production and reduce reliance on imports.
