{"id":833271,"date":"2025-07-28T15:00:00","date_gmt":"2025-07-28T13:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=833271"},"modified":"2025-07-29T08:46:58","modified_gmt":"2025-07-29T06:46:58","slug":"dawie-roodt-warns-of-the-real-disaster-hitting-south-africa-this-week","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/833271\/dawie-roodt-warns-of-the-real-disaster-hitting-south-africa-this-week\/","title":{"rendered":"Dawie Roodt warns of the real disaster hitting South Africa this week"},"content":{"rendered":"\n

Renowned economist Dawie Roodt has warned that the true disaster coming from the 30% tariff on South Africa’s exports to the United States this week will be a hit to economic growth.<\/p>\n\n\n\n

South Africa is currently awaiting its D-Day on 1 August 2025, when the United States’ so-called “Liberation Day” tariff of 30% will apply to all local exports to the US.<\/p>\n\n\n\n

Speaking on OntbytSake’s economic take, Roodt said that the full direct impact of the tariff is still to be determined.<\/p>\n\n\n\n

While markets and analysts have a good idea of what the potential impact will be and which industries will be affected, how the tariff saga plays out is still up in the air.<\/p>\n\n\n\n

The economist explained that the tariff is something that will be imposed on exports entering the United States, so it is not a cost to South Africa directly, but rather on US importers and consumers.<\/p>\n\n\n\n

However, the pain for South Africa comes in at the price-point, because it makes local goods appear more expensive and thus less competitive to other producers.<\/p>\n\n\n\n

“The US importer is the one who has to pay the bill. The impact (locally) is that the US will buy less from South Africa,” he said.<\/p>\n\n\n\n

“It’s an interesting dynamic to see where the ‘tax’ will fall. Will South African producers lower their prices, or will US purchasers pay a higher price? That will determine where the inflationary pressure will lie.”<\/p>\n\n\n\n

About 8% of South Africa’s exports are to the United States, which is also South Africa’s second-biggest trade partner.<\/p>\n\n\n\n

The majority of South Africa\u2019s exports to the US are precious metals (34%), vehicles and aircraft (17.3%), and iron and steel (16.6%).<\/p>\n\n\n\n

Agricultural exports to the US are 4.6% of total exports to the US, rising to 7.8% if prepared foodstuffs are included.<\/p>\n\n\n\n

About 37% of the exports are exempt from the tariffs, critical minerals and resources, but the automotive and agricultural sectors are expected to be hit hard.<\/p>\n\n\n\n

While these industries are already reeling and urging the government to intervene before the 1 August deadline rolls around, Roodt said the true impact of the tariffs is still to be determined.<\/p>\n\n\n\n

He said the net impact of the tariffs may even be relatively small. However, the real issue is the impact this will have on South Africa’s economic growth.<\/p>\n\n\n\n

The true disaster for South Africa<\/h2>\n\n\n\n
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Roodt noted that South Africa has been suffering from low and stagnating economic growth for over a decade, and things are only getting worse.<\/p>\n\n\n\n

“At the beginning of the year, everyone was predicting economic growth of around 2%, but every time new statistics are released, this number declines,” he said.<\/p>\n\n\n\n

Roodt said that South Africa is almost certainly going to report sub-1% economic growth in 2025, with his current prediction being a paltry 0.8%.<\/p>\n\n\n\n

This is in line with projections from other economists, like Investec Chief Economist Annabel Bishop, who projects the GDP impact of the tariffs to be about 0.2 percentage points.<\/p>\n\n\n\n

With most economists and analysts putting South Africa’s current GDP outlook at 1% for 2025, a 0.2 percentage point hit would take it down to 0.8%.<\/p>\n\n\n\n

Roodt said that this is the real disaster for South Africa.<\/p>\n\n\n\n

“What’s important to understand (about the tariffs) is that South Africa has shown stagnating growth for the last 15 years. On a per capita basis, South Africans are poorer than they were 15 years ago.”<\/p>\n\n\n\n

He warned that, even though the tariffs’ impact may be relatively small, they are part of a much larger pile-up of problems impacting South Africa’s growth.<\/p>\n\n\n\n

“Every small thing adds together, and eventually even a small impact becomes a big affair for South Africa’s economy,” he said.<\/p>\n\n\n\n

Roodt said that South Africa could possibly scrape through with 1% or 1.2% GDP growth, but the likely outcome is lower.<\/p>\n\n\n\n

“Even if the direct impact of the tariffs is relatively small, the small things add up, and every negative piece of information that comes out becomes a bigger hit to economic growth,” he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Renowned economist Dawie Roodt warns that the true disastrous impact of the incoming tariffs this week will be the impact on South Africa’s already stagnant economic growth.<\/p>\n","protected":false},"author":10,"featured_media":807895,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[1459,2720,3281,10022],"class_list":["post-833271","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-dawie-roodt","tag-gdp","tag-tariffs","tag-united-states"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/833271","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=833271"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/833271\/revisions"}],"predecessor-version":[{"id":833353,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/833271\/revisions\/833353"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/807895"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=833271"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=833271"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=833271"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}