Trade and Investment Minister, Todd McClay, has responded to confirmation from the United States that tariffs on New Zealand exports will increase from 10 to 15% from 7 August.
Mr McClay says the decision appears to be based on a calculation of trade deficits, with countries running a surplus with the US moved to the higher rate. In New Zealand’s case, the surplus is modest, around US$500 million, and is not overly significant in the context of the US economy, the Minister said.
“Over the past decade, our trade relationship with the US has seen periods where the US enjoyed a significant surplus and times, like now, when New Zealand has a modest one. Overall, our trade is balanced and complementary, reflecting the strength of a long-standing partnership.”
“I am seeking an urgent call with the US Trade Representative to make New Zealand’s position clear: this increase risks harming exporters and consumers of both countries. The US currently faces an average tariff of just 0.8 per cent when exporting to New Zealand, far lower than what we face into their market.
“New Zealand exports around $9 billion of goods to the US annually. At 15%, the impact will be considerable for exporters, many of whom absorbed or passed on the earlier 10% rate. At 15%, that becomes much harder. Â
“Our focus now moves to engaging directly with the US on this current announcement to seek changes to this decision.
“New Zealand has always stood for open, rules-based trade. We will continue to advocate strongly for a resolution that supports our exporters and maintains the strength of our trading relationship with the United States,” said Mr McClay.
