Todd McClay: Trade Minister on his meetings in Saudi Arabia, the US regarding trade and tariffs

The Trade Minister says his trip to the US is all about ensuring our trade tariffs don't shift around too much.  

Todd McClay says the 15% duty on New Zealand goods isn't likely to be removed, as Donald Trump is imposing them on all countries that have a trade surplus with the US.  

He'll be passing on the message that tariffs harm New Zealand.  

McClay told Mike Hosking he'll also be asking about future plans for tariffs.  

He says they want that certainty so they can properly manage their risk. 

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Episode Transcript

Speaker 1 (00:00):
If we joined. The Trade Minister on the road this

(00:02):
morning is in Saudi on his way to Washington, tariff
at fifteen percent worse than places like the UK and Australia.
Of course, the hoper's arms can be twisted at Todd McClay,
Trade Minister back with this morning.

Speaker 2 (00:13):
Mike, good morning.

Speaker 1 (00:13):
Before we talk about Washington, talk to me about Saudi
Arabia as the sort of the emirates in the Middle East.
Matures are you Are you bullush about what we've signed
there and what we're doing there?

Speaker 2 (00:24):
Yes, i am.

Speaker 3 (00:25):
This is I think it's my fourth trip up here
since the election, and the relationship is growing. I had
a chance to meet quite a few New Zealand companies
that are doing work here.

Speaker 2 (00:34):
There's a huge amount.

Speaker 3 (00:35):
Of construction going on, but the government meetings that I'm having,
they want to do a whole lot with us, and
you know, it's just another footprint in the Middle East
where Kiwi exporters, you know, can do well.

Speaker 1 (00:48):
From my observation, the Middle East in general seem like
what you would call genuine free traders, so they're not
We're not tied up in a lot of paperwork and
red tape and ideology. Is that fair or not?

Speaker 3 (01:00):
Yeah, that is right, And that's a change over the
last ten years. I think when I was tradeing, this
is the last time it was a pretty tough place
for Kiwis to do business. Saudi, as an example, is
quite open now. They are welcoming the world. They have
people from everywhere there. They want, you know, want companies
to come and set up. They see they just see
themselves as you know, being quite open, and there's a

(01:20):
real sense of vibrancy and energy here. It's almost as
if you know, anything can happen and it's all good.

Speaker 2 (01:26):
All right.

Speaker 1 (01:27):
Next up Washington, what chance you get something tangible?

Speaker 3 (01:32):
Yeah, look, I'm not going there to get the tariffrate off,
and that's not going to happen. So I want to
be pretty clear what the President has done, has said
every single country that had a trade surplus last year
against the US is fifteen percent or more. But what
I'm going up to do is one express you know
the harm that I think that's doing to trade. But
then secondly, what's the process for US to have that

(01:55):
tarifyrate come down? If we move back to the US
having a surp deficit, which actually most of the time,
our trade has been in another direction and is generally
going to buy planes, gives and stuff the government's likely
to do.

Speaker 2 (02:08):
So what's the process from here.

Speaker 3 (02:09):
Secondly, we just need so much more certainty for our exporters.
If it's going to keep changing, tell us that so
that they can work out where the risk is and
what they're going to do.

Speaker 2 (02:20):
So we'll be up there.

Speaker 3 (02:20):
Look, it's going to be a robust conversation, but it's
a very very important one for US SUS to start
doing that.

Speaker 1 (02:26):
So the Blake, you deal with this James and Green guy?
Who is he and does he make any decisions? And
how far short of the president is he? And I
mean is he really a good contact point?

Speaker 2 (02:36):
Yeah, he's very good.

Speaker 3 (02:37):
So he's the United States trade representative, that's their trade
their trade minister, I suppose you put it. He's the
one that's doing most of the negotiation with China at
the moment. The other part or part of this is
their Commerce secretary, who also is involved in other parts
of the world. But I think what's really really clear

(02:57):
is that the final decision on what happens rest with
President Trump. And in my conversation with jameson Greer less
than twenty four hours after, you know, the President made
the announcement of New Zealand other countries going up by
that five percent.

Speaker 2 (03:11):
It was as simple as this.

Speaker 3 (03:12):
The President said, give me the list of all the
countries the surface about fifteen percent of more, and he
put a ring around them. And so the decision, the
final decision making, is in the White House.

Speaker 1 (03:21):
So from his point of view, Trump's point of view,
you can understand his logic. Is that fair? I mean,
we do have there is a surplus there, and he
wants to balance that.

Speaker 3 (03:29):
Well yeah, well, well you know our surplus is modest.
It's five hundred million dollars. I mean, I was in
Indonesia a week ago and there's a sixteen billion, right,
and so that's sitting at nineteen percent.

Speaker 2 (03:45):
So I do get that he wants to balance that out.

Speaker 3 (03:48):
But if you think about New Zealand and the case
that I will continue to make to them, US goods
into New Zealand average face a zero point three percent
tariff rate.

Speaker 2 (03:57):
We are an open economy, we respect the rules.

Speaker 3 (04:00):
There is nothing stopping trade with the US, and so ultimately,
you know, there's not that much we can do, although
it will swing in the other direction. But I think
the important thing, Mike is, you know, the US is
still an important market for New Zealand.

Speaker 2 (04:14):
We're still selling up there.

Speaker 3 (04:16):
As tariff rates go up, of course it becomes harder,
but there is growing evidence that this is inflationary and
the costs have been passed on in many cases to
US consumers. So I think there's a long way to
go yet before you know exactly how this tariff new
tariff raising and putting in place is going to work.

Speaker 1 (04:33):
What he seems to like as deals, why don't you
buy a couple of planes or something.

Speaker 3 (04:37):
Yeah, well, we'll be talking about that certainly, But I
don't know that we should rush out and do something
just straight away.

Speaker 2 (04:43):
I mean, ultimately we're going to keep doing what we're doing.
There'll be things that get brought from America and you know,
things that will buy from them. But it is the
start of that conversation.

Speaker 3 (04:51):
When I met jameson Greer in Corea a couple of
months ago, and I think it was a third time
i'd had a conversation with him, he was very frank.
He said, you are the good guys. We don't really
have a problem with you. We're negotiating with all the
other countries of the world that have big, big trade
surpluses or very high tariff you're not that we should
sit down and talk later in the year. As a

(05:13):
result of the President making this decision, that's moved some
of that conversation forward. So look, I'm not going I'm
going to be clear again that the fifteen percent is
not coming off. That's the new flow for anybody with
a surplus. But we need to see the process forward
and get them much more certainty for our exporters because
you know, in the end, if it happens again, for
any reason, he decides to put it up against those countries,

(05:35):
it really is going to start biting, all.

Speaker 1 (05:36):
Right, I appreciate it. Trevor well Top played Trade Minister.

Speaker 3 (05:40):
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