Caleb
Fotheringham, RNZ Pacific
Journalist
Leaders in Pacific nations are disappointed
and trying to wrap their heads around the United States’
tariffs.
Fiji’s Finance Minister said that its 32
percent tariff by the Trump Administration – the highest in
the Pacific – is unfair, while the government spokesperson
for Tokelau said he
did not understand how the region threatens the American
economy.
President Donald Trump’s charts claim Fiji
charges the US 63 percent tariffs – citing currency
manipulation and trade barriers – but the Fijian government
disputes the figures.
The US calculated “reciprocal
tariffs” based on whether the US has a trade deficit with
trading partners.
In Fiji’s case, it exports more than
it imports from the US, so it was given a high
tariff.
According to OEC data, in 2023 Fiji exported
US$366m to the United States, while importing US$158m from
the superpower.
The nation’s Finance Minister and
Deputy Prime Minister Biman Prasad that said 72 percent of
imported US goods had zero tax, while 25 percent were given
a tax of less than five percent.
He said that it is
far from the US-imposed 32 percent tariff on goods from
Fiji.
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“We feel that using trade deficit to calculate
the reciprocal tariff rate is wrong, a trade deficit is not
a tariff,” Prasad said.
“It is on that basis that it
is unfair and disappointing.”
He said that Fiji was
readying itself on 3 April, like all nations, for the tariff
announcement, but did not know the details.
“It wasn’t
clear whether they were going to look at every country in
every part of the world or the initial things coming out was
about bigger countries, countries which had huge trade
deficits.”
The tariffs reached as far as Tokelau, a
non-self-governing territory of New Zealand with a
population of about 1500. It was given the baseline 10
percent tariff.
Tokelau’s government spokesperson
Aukusitino Vitale said it showed that the United States knew
very little about his territory.
“I am finding it
really difficult to understand what the threat to the US
economy there is in the Pacific and I think we’re kind of
saddened.”
Sione Taufa with the University of
Auckland’s business school said the tariffs are undermining
a decade of goodwill in the region by the US.
“You
look at it holistically with the tariffs, withdraw from the
climate agreements in relation to the withdrawal of USAID,
from their initiatives and that adds up.”
He said
Pacific nations would start looking away from the US for
trading partners.
The Northern Mariana Islands (CNMI)
is already in a bad economic position as its been unable to
recover its tourism industry post Covid-19. It has resulted
in the shut-down of several large businesses.
RNZ
Pacific’s CNMI correspondent Mark Rabago said the territory
needed to “hunker down and just pray”.
“It will be
devastating of course for an economy as small as the CNMI
because basically all goods coming from China or Europe or
whatever will have an added tax to it so everything will be
more expensive.”
However, Rabago said there could be a
bright side, with the possibility that tariffs could
reignite the territories domestic manufacturing
industry.
The CNMI used to have 34 garment factories,
all located on Saipan, contributing some 60 million US
dollars in direct taxes a year to the local government. The
last factory closed in 2009.
“Manufacturing countries
could actually set up shop in the CNMI and basically the
CNMI could be an intermediary where they could make goods
here, just like what happened in the garment
industry.”
Prasad said his government would make its
decisions on what to do about the tariffs once the impact
becomes clearer.
He said some goods could become
cheaper, for example China would likely look for new markets
to buy its goods.
“There is a lot of uncertainty and
the expectation of what might happen or what other countries
do in the short to medium term will have to be factored in,
to policies and the decisions, that we make here in the
Pacific and in Fiji with how we respond to this.”
He
said Fiji’s trade ministry is talking with its US
counterparts and other trade partners about next
steps.
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