{"id":834377,"date":"2025-08-08T09:23:47","date_gmt":"2025-08-08T07:23:47","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=834377"},"modified":"2025-08-08T09:28:27","modified_gmt":"2025-08-08T07:28:27","slug":"things-could-go-from-bad-to-worse-for-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/834377\/things-could-go-from-bad-to-worse-for-south-africa\/","title":{"rendered":"Things could go from bad to worse for South Africa"},"content":{"rendered":"\n

With the United States’ “Liberation Day” tariffs now in effect, the world’s biggest economy appears to be turning its attention to punishing the BRICS bloc, which includes South Africa.<\/p>\n\n\n\n

According to economists at the Bureau for Economic Research (BER), the Trump administration’s move to impose a further 25% tariff on India this week is just the latest salvo against the bloc.<\/p>\n\n\n\n

In a new executive order, US President Donald Trump imposed an additional 25% punitive tariff on India, citing its continued purchases of Russian crude oil. This comes on top of the 25% previously levied.<\/p>\n\n\n\n

It followed Washington’s move to hike Brazil’s tariff up to 50% and comes after months of tensions and an all-out tariff war between the US and China, and continued pressure on Russia.<\/p>\n\n\n\n

The new tariffs are set to take effect 21 days from Wednesday (6 August), allowing time for another round of negotiations.<\/p>\n\n\n\n

“With this move, India joins Brazil as the country facing the highest combined US trade tariffs, now at 50% each. Other BRICS members are also heavily impacted,” the BER noted.<\/p>\n\n\n\n

“While the US-China tariff truce, set to expire on 12 August, remains in place as talks continue, the US President has warned that Beijing could face further tariffs if it too continues to buy Russian oil.”<\/p>\n\n\n\n

Compared to its BRICS peers, South Africa has come off relatively lightly with the 30% tariff that has been effected. However, given its affiliations, worse could still be coming.<\/p>\n\n\n\n

The US has previously floated the idea of imposing an additional 10% tariff on BRICS countries just for being in an economic bloc counter to American interests.<\/p>\n\n\n\n

South Africa’s position has not been helped by the ANC coming out aggressively against the United States, even daring the Trump administration to sanction its leaders.<\/p>\n\n\n\n

Focusing on the political tussles between South Africa and the US, the ANC firmly rejected the Trump administration’s demands to alter local domestic policies, such as black economic empowerment.<\/p>\n\n\n\n

Referring to a US bill that calls for a review of bilateral ties between the US and South Africa<\/strong><\/a>, ANC Secretary-General Fikile Mbalula said that ANC leaders would accept sanctions before allowing \u201cimperialists to subvert our democracy, to subvert our sovereignty\u201d.<\/p>\n\n\n\n

\u201cIf they want to bring sanctions on us, let them bring them,\u201d he said.<\/p>\n\n\n\n

The impact may be overblown<\/h2>\n\n\n\n
\"\"<\/a>
Renowned economist Dawie Roodt<\/figcaption><\/figure>\n\n\n\n

The BER said that the tariffs, and the headlines around them, may be overblown in the wider context of South Africa’s economy.<\/p>\n\n\n\n

“We don’t deny that the economy, at least in the short run, will be worse off than in the absence of the tariffs or that some sectors or firms will be disproportionately negatively affected,” it said.<\/p>\n\n\n\n

“However, it is unlikely to weigh meaningfully on growth on its own.”<\/p>\n\n\n\n

The group pointed to the Absa Purchasing Managers\u2019 Index (PMI) moving into expansionary territory for the first time in nine months in July, on the eve of the implementation of US tariffs.<\/p>\n\n\n\n

“This suggests that the media reports on the impact of US tariffs are somewhat overblown,” the BER said.<\/p>\n\n\n\n

However, it was cautioned that this could change if tariffs become even more restrictive or if countries or regions levy harsher tariffs on US goods exports in response.<\/p>\n\n\n\n

Most economists agree that the impact of the tariffs will be limited to specific industries like the automotive and agricultural sectors.<\/p>\n\n\n\n

Businesses in these sectors are already suffering the effects of the tariff, and more closures and job losses are expected in the coming months.<\/p>\n\n\n\n

On the other hand, key industries and exports\u2014particulary in minerals and resources\u2014are exempt from the tariffs.<\/p>\n\n\n\n

According to Investec Chief Economist, Annabel Bishop, the true impact of the tariffs is unlikely to show in economic data until 2026, due to the rates just coming into effect and various lags in data.<\/p>\n\n\n\n

Bishop has estimated that the economic impact of the tariffs will be a 0.2 percentage point hit to GDP, moving to between 0.1 and 0.2 percentage points if South Africa can negotiate a better deal.<\/p>\n\n\n\n

Conversely, it’s safe to assume the impact will be bigger if the tariffs get more restrictive.<\/p>\n\n\n\n

Efficient Group Chief Economist Dawie Roodt agrees with the BER that the US tariffs’ overall economic impact will be relatively small.<\/p>\n\n\n\n

However, he argues that South Africa cannot afford even a small hit to GDP, as it has many other factors at play that are stifling growth.<\/p>\n\n\n\n

South Africa is currently expected, at best, to record 1% GDP growth in 2025, moving up to 1.3% in 2026. These figures were projected before the tariff came into effect.<\/p>\n\n\n\n

All things now considered, the country is likely to record another year of sub-1% growth, following the stagnating trend seen over the last decade.<\/p>\n","protected":false},"excerpt":{"rendered":"

The United States appears to be turning its attention to the BRICS bloc, which means South Africa’s tariff woes might not be over.<\/p>\n","protected":false},"author":10,"featured_media":828901,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[19853,14829,1459,1498,3281],"class_list":["post-834377","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-annabel-bishop","tag-ber","tag-dawie-roodt","tag-investec","tag-tariffs"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834377","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=834377"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834377\/revisions"}],"predecessor-version":[{"id":834388,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834377\/revisions\/834388"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/828901"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=834377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=834377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=834377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}