Ramaphosa government ‘asleep at the wheel’ as US Tariffs looms – Economist Dawie Roodt

U.S. TARIFFS COULD TRIM GDP BY 0.2% UNDERMINING FRAGILE GROWTH The South African government has failed to grasp the urgency of impending 30% tariffs on exports to the United States, set to take effect on 1 August, according to leading economist Dawie Roodt. He warns the punitive measures could severely impact South Africa’s economy, citing a lack of proactive engagement and constructive diplomacy with the Trump administration. Roodt notes that Washington appeared by all accounts to have firmly rejected any extension to the deadline, with Pretoria’s diplomatic inertia deepening South Africa’s economic vulnerability. “While the 30% tariff won’t collapse the economy in isolation,” Roodt explains, “it may shave off 0.1% to 0.2% of GDP—no small matter for an economy growing at just 0.7% or 0.8%.” He suspects this is only the beginning, with the possible loss of African Growth and Opportunity Act (AGOA) benefits looming. “That would be a major blow,” he says. “We can debate whether the U.S. approach is fair, but they hold the upper hand. We must Roodt warns that South Africa’s automotive sector will be particularly hard hit. While European car exports will face a newly agreed 15% tariff, South African vehicles will be subject to the full 30%, leaving local manufacturers at a distinct disadvantage. The Reserve Bank estimates the tariffs could trigger up to 100,000 job losses, with manufacturing hubs in East London, the Eastern Cape, and Pretoria expected to be most affected. Roodt argues that diversifying export markets will be difficult. Europe is fiercely competitive, Asia is dominated by Chinese manufacturers, and African nations generally lack purchasing power for high-value products such as vehicles. On currency implications, Roodt says, “unless there’s a sharp market reaction, I’m not overly concerned about the rand or inflation in the short term.” Financial markets have already begun pricing in the tariffs, but their full impact will take time to emerge. What is certain, he adds, is that South Africa continues to suffer the consequences of long-standing macroeconomic policies.