Tim Groser: Former NZ ambassador to the US on Trump hinting towards a U-turn on China tariffs

It's looking more and more likely that Donald Trump is laying the groundwork for a u-turn on the tariffs implemented on Chinese goods.

Tariffs are currently sitting at 145 percent - but Trump recently claimed they'll 'come down substantially, but it won't be zero'.

Former NZ ambassador to the US Tim Groser says it's unclear what will happen next - given all the uncertainty Trump's economic policies have created.

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Episode Transcript

Speaker 1 (00:00):
Now it looks like Donald Trump is laying the groundwork
for a climb down from his massive tariffs on the Chinese,
because they're obviously sitting at one hundred and forty five percent.
Speaking earlier today, he said one hundred and forty five
percent is very high. It won't be that high. It'll
come down substantially, but it won't be zero. And this
comes after the US Treasury Secretary. He says he expects
a de escalation in the very near future.

Speaker 2 (00:20):
Now.

Speaker 1 (00:21):
Tim Grosser is the former New Zealand Ambassador to the USA.

Speaker 3 (00:23):
Tim, Hi, Hello.

Speaker 1 (00:27):
How mental is this situation? Do you think, on a
scale of one to ten, how mental?

Speaker 3 (00:32):
I would love to have been in the Great Hall
of the People to watch President's expression a few hours
ago when he was told this piece of news, and
it reminds me when I found out because I've been
on the road today, I've just found out what he
said of advice I got as a very young official
from a very distinguished New Zealand diplomat who'd said to me,

(00:52):
you know, the best negotiators in the world of the sarmons,
because you put a proposition to the summons and they
sit there, they look at you, and they don't say anything.

Speaker 2 (01:02):
And what you then do is you immediately change your
negotiating position. So I think, you know, the Chinese and
the Salmons are probably trained in the same basic schools
of human reality. They just do nothing while people keep
shifting their positions around them. I mean, I just do
not know what on earth the president thinks is now
going to unfold, having created this level of certainty and

(01:24):
uncertainty once before somebody else, that else was interviewing. I
remember the old children's nursery rhyme about the grand old
Duke of York. Think President Trump the Grand old Duke
of York. He had ten thousand men, He climbed them
up to the top of the hill, and he.

Speaker 3 (01:43):
Climbed them down again. In other words, who the hell
can deal with this situation? And the answer is nobody.

Speaker 1 (01:50):
What do you think happens? I mean, where do you
think Trump realistically ends up with the China tariffs?

Speaker 3 (01:57):
Well, we're dealing here with what Marxists would call a
real unresolved contradiction. What his objectives are? You cannot use
high tariffs on declar trade war on all the countries
in the world, and in particular on China because you

(02:17):
want to create manufacturing and new jobs and get the
US back to where they were in nineteen fifty. If
at the same time you're saying no, I just use
this as a negotiating point, because no American will invest
in those new industries if they think they can be
negotiated away tomorrow. So we're actually dealing with a complete

(02:38):
contradiction in what the objective is. And I think in
this situation most people will just do nothing. They will
sit on their hands.

Speaker 1 (02:49):
Well they would. You'd be wise to sit on your hands,
because you hardly know what question did you at any
point though this? Look I was saying earlier in the program.
With Donald Trump, we often judge him on what he
says he's going to do, and that seems like a mistake.
What we should be judging him on is what he
ends up doing, because most of the time, all of
the stuff is just him being a blowhard. Right, did

(03:09):
you ever for one second believe he really was going
to do this?

Speaker 3 (03:15):
Well, I mean he has implemented ten percent tariffs. Admittedly,
that was a massive climb down from the White House
lawn Liberation Day. You may record when you put on
massive tariffs, including sort of absurdities like fifty percent tariffs
on the Soto for God's sake, and then immediately reduce
them again. But we do know that he has done

(03:36):
something which is screw up the international training system. And
this still leaves unresolved the central issue I was saying
to a few people earlier today. You couldn't run something
as simple as the tiny news inland economy if every
business person, including your radio station, thought the underlying rules

(03:59):
that affect their business decisions could change radically day by day.
You could not run this little economy called out on
that basis. You certainly can't run an international economy on
that basis. So we still leave the big, the mother
of all questions behind us, which is or in front
of us, which is how are we going to manage

(04:19):
international trade without a system of rules and norms? Now?
I think the answer to that is, first of all,
nobody else. The United States is the pre eminent power,
There's no doubt about that, and the guarranteur in the
ost seventy five years of the open trading system, but
it's created a whole set of countries that actually do

(04:42):
believe in having a rules based system the United States
is not having other people following them down this rat hole.
So the Prime Minister will have had a discussion in
London twenty four hours ago with Keir Starmer. He will
have other discussions with other leaders. They all agree on
the need for a rules trading system. So you know

(05:02):
it's the United States has to finally define its position
in relationship to the rest of the world. Not just
the rest of the world has to define its position
relative to the United States.

Speaker 1 (05:14):
Tim. Thank you always appreciate your expertise. Thank you so
much for talking to us. Tim Grosser, former New Zealand
Ambassadors to the US. For more from Hither Duplessy Allen Drive,
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