RW Johnson’s rational perspectives – DA’s options after Budget, US 30% tariff on SA exports

Former Oxford Don RW Johnson provides context on the big news of the past 25 hours, arguing that the DA doesn't have to leave SA's Government of National Unity; and the fresh challenge local exporters face – especially car makers – after the US levied a 30% tariff on all SA goods. He spoke to BizNews editor Alec Hogg..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here..If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here .Listen here.Highlights from the interview ___STEADY_PAYWALL___.In one of the most turbulent 24-hour cycles in recent memory for South African politics and its fragile economy, few are better placed to offer calm, clear-eyed analysis than veteran political thinker RW Johnson. In a wide-ranging interview with BizNews founder Alec Hogg, Johnson unpacked the consequences of new US tariffs, deepened tensions within the Government of National Unity (GNU), and the ANC's increasingly erratic governance style..At the centre of the storm lies the announcement from the United States that it will impose a 30% tariff on all South African goods—effectively a hammer blow to critical export industries, particularly the automotive sector, which exported R23 billion worth of vehicles to the US last year. Johnson, never one to sugarcoat reality, said the warning signs have long been flashing.."We've known for a long time that BEE is a tremendous constraint on foreign investment," he said. "Investors have made their feelings clear and stayed away in droves. This isn't news to us. But Trump doesn't need a reason—he'll do what he wants, and South Africa is simply on the receiving end of that.".According to Johnson, half of the new tariff burden stems from US retaliation over what it sees as anti-competitive policies, particularly Broad-Based Black Economic Empowerment (BEE), which Washington views as a hidden tax on American companies. More broadly, the Trump campaign is revisiting its mercantilist doctrine, punishing countries that run trade surpluses with the US. "It's completely mistaken," Johnson said, "but it's what we have to deal with.".And if Pretoria hoped diplomatic overtures might avert the damage, Johnson dismissed those efforts outright. "Sending ANC officials to Washington to repeat their party line was a fantasy. If you want to deal with this White House, you need serious bargaining chips—like pulling out of the ICJ case, scrapping BEE, or binning the Expropriation Act. Anything less is meaningless.".Read more: RW Johnson: Between a rock and a hard place – South Africa's stand off with Trump.Budget battles and fragile unity.If external threats were not enough, domestic tensions are boiling over. On Tuesday, the national budget was passed—but not with the DA's support. Instead, the ANC relied on a ragtag group of smaller parties Johnson derisively labelled "rats and mice" to secure the numbers..This has placed the GNU on shaky ground. Finance Minister Enoch Godongwana's final words in parliament were blunt: "The DA cannot come back into the government because they will have to implement a budget they voted against." Johnson believes this drama has pushed the GNU to a crossroads.."Ramaphosa sounds like he's had enough. He's under pressure from within the ANC to ditch the DA. But the DA's position isn't weak—they're behaving as any coalition partner would, negotiating on issues of economic growth and employment. It's bizarre that the ANC resists those proposals.".Johnson was particularly alarmed at the tax increases in the new budget—especially VAT hikes that target the poor. "It's baffling that the ANC would back themselves into this corner. Even more puzzling is the lack of economic knowledge in parliament. Listening to the debate was painful.".One particularly galling moment, he noted, was ActionSA's Athol Trollip downplaying the rand's plummet as just "one percent in a month," when in fact it had nosedived far more dramatically post-budget. "It's not that these people are stupid," Johnson said. "But they're constrained by political shifts and seem entirely economically illiterate.".DA's dilemma: stay or walk?.The DA's future participation in the GNU now hangs in the balance. Some, including political strategist Moeletsi Mbeki, have urged the party to walk away and focus on the 2029 elections. But Johnson believes that's premature—and possibly self-defeating.."This budget spat isn't a good enough reason to leave. It's technical, it's hard to explain, and the public won't understand it. If they walk now, their business supporters—who want stability—will be furious. If the DA is going to leave, it has to be over something major, like NHI.".Moreover, John Steenhuisen's personal credibility is tied to the GNU. Having championed the DA's participation, his leadership would be undermined by an exit. And leaving would give more space to a weakened ANC to seek support from the EFF or MK Party—a prospect that should "terrify everyone," Johnson warned..Read more: BN Briefing: SA under fire with Trump tariffs; ANC doubles down on support for Palestine.The great automotive reckoning.Back on the economic front, the looming tariff crisis could force a harsh reckoning for the South African motor industry. Johnson foresees a scramble among multinational automakers to reassess whether it still makes sense to manufacture cars in the country.."Job losses are coming, and not just here. South Korea, Japan, and Germany will also be badly hit. But our problem is compounded by weak governance and inconsistent policy. Carmakers will be asking: do we stay, or is this country no longer viable for production?".South Africans already pay 30% more for cars due to import duties that are meant to protect local jobs. But if the US market becomes unviable, the very rationale for those duties may vanish, placing even greater pressure on local consumers and workers..Innovation or irrelevance.Asked what advice he would give to worried entrepreneurs and citizens, Johnson called for innovation and agility. "Be versatile. Look for alternative markets, even alternative products. Elon Musk says his most important product isn't cars anymore—it's humanoid robots. That's how you survive in a volatile world.".It's sound advice for a nation that seems, once again, to be sleepwalking into another self-made crisis. Whether the ANC wakes up in time—or the DA finds the courage to steer differently—will define South Africa's next chapter..Read also.GNU on shaky ground after parliament passes budget despite DA objectionJoel Pollak on Trump's 30% tariff shock for SA – BEE + motor sector's 30% protection targetedThe Economist: Trump tariffs take US trade policy back to the 19th century

RW Johnson’s rational perspectives – DA’s options after Budget, US 30% tariff on SA exports

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