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Todd McClay: Trade Minister reacts to new tariffs set by the Trump administration · Best of Business

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  Speaker 1: You're listening to a podcast from news Talk zed Be
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  Speaker 2: Ten percent. That's the tariff rate that Trump's slapping on
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  Speaker 2: key we exports Stateside. It'll affect the nine billion dollars
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  Speaker 2: worth of goods that we're see in that as our
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  Speaker 2: second largest market for goods. Of course, there are indirect
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  Speaker 2: consequences as well through our Asian partners. But right now
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  Speaker 2: we're going to the Trade Minister Tom McLay Good evening.
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  Speaker 3: Minister Ryan Good afternoon.
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  Speaker 2: Good to have you on the show. So I know
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  Speaker 2: you're going to go back and question this number in Washington.
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  Speaker 2: Have you had any update from that?
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  Speaker 3: Do you mean the twenty percent?
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  Speaker 2: Yeah?
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  Speaker 4: Yeah, So what they've done is when President Trump put
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  Speaker 4: up for the comparison all the countries, it showed that
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  Speaker 4: New Zealand's tariff rates for exports from the US and
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  Speaker 4: New Zealand's twenty percent and therefore the ten percent tariff
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  Speaker 4: levied on US. They have published some more information. Of course,
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  Speaker 4: it's nighttime there, so our officials will get into it first.
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  Speaker 3: Thing when they're away.
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  Speaker 4: It looks like what they've done as they've taken the
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  Speaker 4: amount that we export to them minus the amount that
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  Speaker 4: they export to US. There's a twenty percent difference, and
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  Speaker 4: they've just said, well, that's the difference in the tariff rate,
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  Speaker 4: which is not our tariff rate for a US selling
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  Speaker 4: into New Zealand on average is one point nine percent.
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  Speaker 4: We face about two point two percent up there. But
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  Speaker 4: we'll be discussing that with them tomorrow and providing some clarity.
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  Speaker 4: Irrespective of that, the lowest tariff rate they are putting
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  Speaker 4: on anybody in the world is ten percent across the board.
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  Speaker 4: So even if we move that number around, it's not
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  Speaker 4: clear that we would fall below ten percent Australia. Many
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  Speaker 4: other countries are in the same same category as we are,
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  Speaker 4: although compared to I suppose the Europeans that are facing
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  Speaker 4: a thirty four percent tariff rate as challenging as this
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  Speaker 4: is for our export as they are no worse off
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  Speaker 4: when it comes to competing its other exports to the
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  Speaker 4: US as a result of this.
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  Speaker 2: Yeah, would you call it the best case scenario? In
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  Speaker 2: a way?
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  Speaker 4: It's look, it's much better than many countries. Most certainly,
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  Speaker 4: frates put on New Zealand exports is not a good thing.
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  Speaker 2: That number that's wrong, isn't it?
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  Speaker 4: So it is wrong, and it is wrong in as
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  Speaker 4: far as that is not the tariff rates we put
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  Speaker 4: in place. I think the highest tariff rate we have
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  Speaker 4: on anything that the US can send to US is
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  Speaker 4: about five percent. But it looks like they've used a
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  Speaker 4: different type of calculation as to balance of trade as
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  Speaker 4: opposed to tariff rate for some reason.
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  Speaker 2: But they clearly said on that. You know the chart
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  Speaker 2: that Trump held up said New Zealand that the rate
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  Speaker 2: that America is charged teriff rate charge twenty. That is wrong,
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  Speaker 2: isn't it.
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  Speaker 3: That's that is not coorect that's right.
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  Speaker 4: The average the average rate that US pays on exports
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  Speaker 4: in New Zealand is one point nine percent.
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  Speaker 2: So why are they using this weird calculation on the
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  Speaker 2: trade deficit and then you know, somehow, somehow relating that
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  Speaker 2: to a terif rate.
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  Speaker 4: Yeah, it's really not clear, and that those would be
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  Speaker 4: one of the things that we're asking officials to sort
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  Speaker 4: of clarify and discuss.
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  Speaker 3: With the US.
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  Speaker 4: I mean, at the one level, what they are probably
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  Speaker 4: saying as the USS two trillion dollar trade deficit, we
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  Speaker 4: want people around the world to buy more from US.
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  Speaker 4: In fact, in the New Zealand economy, the tariff rates
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  Speaker 4: are low, there are no restrictions as to what you
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  Speaker 4: can sell to New Zealand from the US or many
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  Speaker 4: other countries, and so we don't have those barriers. What
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  Speaker 4: they've also said, though, is I suppose is that there
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  Speaker 4: are a group of countries where we put ten percent
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  Speaker 4: on that's the minimum that anybody has. These are countries
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  Speaker 4: we are not as worried about, or we're worry less about.
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  Speaker 4: Their focus is on Canada and the European Union, in
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  Speaker 4: China and many other countries of the world, where it
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  Speaker 4: ranges from twenty percent I think over forty percent in
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  Speaker 4: some cases. And so you know, as you said earlier,
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  Speaker 4: the rates of New Zealand has applied against us are
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  Speaker 4: better than many although a ten percent is still going
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  Speaker 4: to be challenging from some of our exporters up into
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  Speaker 4: that market.
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  Speaker 2: Have you had just funny, have you had any update,
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  Speaker 2: because I know your officials were working on trying to
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  Speaker 2: let you know what the economic impact of all of
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  Speaker 2: this might be. Now that we have numbers, do you
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  Speaker 2: have a number?
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  Speaker 4: So they're working through that very very quickly for us,
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  Speaker 4: because although they did a bit of modeling of course
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  Speaker 4: I had to wait and see exactly what it'd be.
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  Speaker 4: So what we see is ten percent across our nine
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  Speaker 4: billion dollars exports is nine hundred million dollars. But interestingly,
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  Speaker 4: a lot of this is going to be passed on
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  Speaker 4: to their consumers. You take the wine that we sell there,
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  Speaker 4: it'll be ten percent more expensive, European wine thirty four
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  Speaker 4: percent more expensive. They may consumer less or they may
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  Speaker 4: end up just paying more. And so you know what
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  Speaker 4: we do now as tariff rates are inflation can be inflation. Really,
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  Speaker 4: they do put up costs for consumers. It's one of
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  Speaker 4: the reasons that we're being very clear today we're not
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  Speaker 4: going to retaliate because that would just put up costs
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  Speaker 4: on New Zealand exporters and drive inflation.
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  Speaker 3: We won't be doing that us.
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  Speaker 2: We can't. I mean, we're the small trading notion that could.
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  Speaker 2: We can't exactly start and whacking people with terrorists, can
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  Speaker 2: we well, tod but I appreciate your time trading for.
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