Russell
Palmer, Political Reporter
Trade Minister
Todd McClay says his United States counterparts have
clarified some details around how the
new tariffs regime will work.
He said he had asked
his officials to engage quickly with the US administration
and they had been in contact overnight (New Zealand time),
mainly to clarify two things: that New Zealand does
not have a 20 percent tariff against US exports, and to
clarify how the 10 percent base tariff rate would be
applied.
He told RNZ the flat 10 percent duty being
applied to US imports would apply on top of any existing
tariffs, but there were some exceptions for goods already
facing high fees.
“So, the 10 percent goes on
everything New Zealand exports, except for… steel and
aluminium, there won’t be any additional and that’s because
they already sit at 25 percent, which was a new tariff they
put in place; and no tariff upon wood products at the moment
because of a separate investigation they have
underway.”
He said that investigation was due back by
November, and there was still “a lot more work to do there
to make the case that there shouldn’t be any additional cost
upon New Zealand wood being sent to the US”.
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He had
not heard of any other exemptions, however, meaning other
goods being exported to the United States would face a 10
percent duty on top of any tariffs already being
paid.
US President Donald Trump had pitched the
tariffs as reciprocal – matching other countries’ tariffs on
US goods – but instead of calculating other countries’
average tariffs and what has been described as non-tariff
trade barriers, his administration simply
divided the country’s trade deficit by its exports to the
US.
McClay suggested the United States’
calculation of other countries’ tariffs and trade barriers
was not so much a misunderstanding as a mislabelling, saying
the US seemed to be talking about a trade
imbalance.
“So, they’ve said that’s a tariff, that’s
not correct. The tariff rate is 1.9 percent, our tariff
rates are lower… for US exporters into New Zealand than
New Zealand’s facing the other direction.
“I think
it’s sending a signal they want a balance in trade. They
want countries of the world to buy more from the US. I would
make the case… that actually our trade is already very
well-balanced.
“We are selling them more than we’re
buying at the moment, it’s about a billion dollars
difference a year. That fluctuates. It’s not that many years
ago that we were buying a lot more from than we were selling
them, and that will continue.
“So, I’ll be making the
case to my counterpart, both in writing and when I hope to
see him early sometime next month, that actually the
relationship is well balanced, it’s complementary, New
Zealand respects the rules, and we don’t think that the 10
percent should be there – albeit that the US has signalled
this is a new tariff regime they have where all countries
will face at least 10 percent.”
He said, however, that
regardless of the calculation, the result was that New
Zealand was facing a 10 percent tariff – the same as
Australia and the United Kingdom – and as low as any other
country. This also meant some potential advantages for New
Zealand exports, both into the United States, and into other
markets.
“Some of our exporters now that had a chance
to work through the detail that’s available, are telling me
they think they’ll have opportunities to perhaps increase
their sales against other countries in the US
market.
“Anecdotally, some of our exporters are
telling me that since China put a tariff on US beef and
other restrictions in place – I understand there is not US
beef going into China at this time – they’ve been receiving
calls from their customers with increased interest in
getting product out of New Zealand [and into
China].
“Consumers in China, as other parts of the
world, still need steaks in the restaurants and on the
supermarket shelves and so they will be looking to other
areas of the world to buy these products. We have trading
arrangements with 100 countries in the world and so, you
know, our exporters are nimble, I back them to find those
opportunities and where there is
demand.”
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