Latest / Best of Business / Todd McClay: Trade Minister unpacks what Donald Trump's proposed tariffs could mean for New Zealand

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Todd McClay: Trade Minister unpacks what Donald Trump's proposed tariffs could mean for New Zealand · 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: Good Evening seven after five News Talks d B. Trump's
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  Speaker 2: trade war is on China, Canada, Mexico. They're all retaliating.
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  Speaker 2: The President's been addressed in Congress. He says there's more
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  Speaker 2: to come.
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  Speaker 3: Mister, tariffs will go on agricultural product coming into America
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  Speaker 3: and our farmers starting on April second. It may be
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  Speaker 3: a little bit of an adjustment period. We had that
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  Speaker 3: before when I made the deal with China fifty billion
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  Speaker 3: dollars of purchases and I said just bear with me,
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  Speaker 3: and they did.
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  Speaker 2: You can say that again. The can we save a
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  Speaker 2: providers here and warning tough times ahead. As you can imagine,
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  Speaker 2: markets have been hugely volatile. The big question, of course,
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  Speaker 2: is how long is this going to last. Tom mcclay's,
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  Speaker 2: the Minister of Trade is with us.
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  Speaker 4: Good Evening, Minister hy Ryan, Hey, how are you good?
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  Speaker 2: Thank you? How have you got any numbers there or
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  Speaker 2: any any information from officials on modeling on how this
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  Speaker 2: might impact New Zealand.
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  Speaker 5: Well, from the point of view of the tariffs that
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  Speaker 5: are the US as a post on Canada, Mexico and
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  Speaker 5: China and the retality ones which they're talking about haven't
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  Speaker 5: released yet. No, we don't get a picture of that.
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  Speaker 5: And the reason for that is although we're not directly
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  Speaker 5: affected in this latest round of tariffs, there is going
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  Speaker 5: to be some flow on effect, either because of confidence
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  Speaker 5: of those markets where consumers and businesses don't buy as
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  Speaker 5: much those we trade with, or secondly as a result
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  Speaker 5: of New Zealand companies that may have a presence there
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  Speaker 5: Mexico as an example with Fisher and pikel who will
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  Speaker 5: be directly affected. So after officials to work that up,
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  Speaker 5: but until we see more detail, it is a little
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  Speaker 5: bit hard to know. It would be a bit of
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  Speaker 5: second guessing. But I can tell you we're taking this
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  Speaker 5: very seriously, and as I said on your show a
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  Speaker 5: couple of weeks ago, we instructed officials and our embassy
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  Speaker 5: in Washington to be engaged proactively with US administration and
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  Speaker 5: reminding them of making the case of how well our
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  Speaker 5: trading relationships and how balanced it is. The cantinue to
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  Speaker 5: do that, but it's going to see exactly what President
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  Speaker 5: Trump is talking about when it comes to agriculture.
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  Speaker 2: Yeah, that is the big worry. We head the Meat
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  Speaker 2: Industry Association. We had Nathan Guy on the show last night.
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  Speaker 2: He said he's really worried about the agricultural tariffies talking
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  Speaker 2: about because that's I mean, that's our bread and butter.
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  Speaker 5: Yeah, it's very important to us, all right. So if
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  Speaker 5: tariff is put on all exports to the US, whilst
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  Speaker 5: we will remain competitive against others, it's just a cost
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  Speaker 5: to the New Zealand exporder. It's a tax or a
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  Speaker 5: tariff at the border. There's more to this though than
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  Speaker 5: just the tweet all or the announcement the other night
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  Speaker 5: from the President. If you think about beef as an example,
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  Speaker 5: New Zealand beef is an important market for US. Predominantly
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  Speaker 5: it's mixed with the US beef and we have a
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  Speaker 5: lot of beefat that goes up for their hamburgers.
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  Speaker 4: We know that they need to bring that in for
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  Speaker 4: the amount of hamburger they eat.
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  Speaker 5: If there is a tariff or it can't come in
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  Speaker 5: from overseas, are either going to have shortages or those
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  Speaker 5: prices go up. And I think that's why you've seen,
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  Speaker 5: you know, the market in the US and elsewhere where
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  Speaker 5: in the world take quite a hit over the last
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  Speaker 5: day or two.
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  Speaker 4: What we don't know is whether he's.
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  Speaker 5: Talking about all agricultural products and everybody or some from
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  Speaker 5: some parts of the world exactly what.
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  Speaker 4: But our people are engaging the most information as they.
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  Speaker 2: Can, and are they listening to what we're saying. You know,
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  Speaker 2: the argument about the balanced trade is a good one,
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  Speaker 2: but are they listening to it? About the beef and
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  Speaker 2: the meat patties is a good one, but are they
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  Speaker 2: listening Well.
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  Speaker 5: I think at the level of the officials and those
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  Speaker 5: who engage with we have a good hearing and there's
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  Speaker 5: very good and constructive conversations on going. But I think
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  Speaker 5: I think that you look at the you know, the
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  Speaker 5: social media other night and the President said that he's
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  Speaker 5: focusing on agriculture next and we'll see what that means.
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  Speaker 4: But there's a second part of this.
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  Speaker 5: If we take both Canada and also China as examples,
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  Speaker 5: they are both important beef from the US. The US
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  Speaker 5: has slapped tarifs on them that said they're going to reciprocate.
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  Speaker 5: So in the case of China, they will still need
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  Speaker 5: the chief that they are bringing from the rest of
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  Speaker 5: the world from the US. On the restaurant tabor of
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  Speaker 5: the supermarket shelf. They their consumers are likely to look
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  Speaker 5: out where and so there will be some opportunities for
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  Speaker 5: New Zealand, which is hugely.
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  Speaker 2: Which is hugely ironic, right, because we've been trying to
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  Speaker 2: diversify away from China and we diversified towards America. It's
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  Speaker 2: now our second largest trading partner for goods, and now
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  Speaker 2: we've been hit with these potentially been hit with these terrifts.
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  Speaker 2: It's ironic.
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  Speaker 4: Yeah, that's that's right.
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  Speaker 5: The other case that we have been making will continue
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  Speaker 5: to is actually New Zealand exporters into the US market
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  Speaker 5: predominantly face greater tariff rates, higher tariff rates than US
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  Speaker 5: exporters into New Zealand.
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  Speaker 4: And the reason for that is we have a very
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  Speaker 4: low tariff phrasing.
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  Speaker 5: I've asked my officials to go through line by line
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  Speaker 5: and find everywhere there is a discrepancy where our tarifrate
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  Speaker 5: might be higher than there, so we have a clear
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  Speaker 5: understanding of that. So far, much of that there are
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  Speaker 5: no imports from the US down to New Zealand. But
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  Speaker 5: we're working through that so that we can be in
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  Speaker 5: a better place to know what.
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  Speaker 2: We need to do all right, minister, Thank you very
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  Speaker 2: much for your time. Tom McLay, the Minister Trade in
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  Speaker 2: the midst of a trade war, twelve minutes after five.
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