Todd McClay: Trade Minister on the tariffs imposed by the US, discrepancy in tariff reporting

The Trade Minister is playing down New Zealand's chances of getting an exemption to Donald Trump's 10% tariffs. 

The Trump administration says it's imposing the tariffs in response to our 20% tariff on US goods. 

Todd McClay says our average tariff on US goods is actually less than 2%, and the 20% figure appears to be based on the trade balance between our countries last year. 

He told Mike Hosking we may be able to correct their record, but we probably won't be able to change their minds. 

McClay says even if New Zealand officials can make their case to the US counterparts, the minimum base rate for tariffs remains at 10%. 

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Episode Transcript

Speaker 1 (00:00):
So where are we at this morning in this new
world of terrorists? Possibly a trade warren is the confusion
over our ten slash twenty percent sorted trade Minister Todd
McLay we with us good morning, my.

Speaker 2 (00:08):
Good morning, ten or twenty.

Speaker 3 (00:11):
Well, we will be facing ten percent, as every country
in the world will, although many others obviously have will
have a higher teriff rate than that. There was confusion
about where they got their numbers in as far as
what they think New Zealand's tariff rate applied against US
exports and into New Zealand. Actually our average rate is
about one point nine percent for the US. It seems

(00:33):
they've got some unusual formula to come up with twenty percent.
That's not correct. It's wrong, and our officials are starting
the process to correct.

Speaker 1 (00:41):
So you still no further ahead this morning than we
were yesterday. Is it hard to get to a Trump official?
Given I'm assuming the whole world is trying to get them.

Speaker 2 (00:50):
They're very, very busy over there.

Speaker 3 (00:52):
I think you're right, a lot of countries that face
twenty thirty forty cent terrorists are making contact. I expect
to be loved, negotiation reached out. But we'll just work
through this. I mean, ultimately they are wrong. We don't
have a twenty percent tariff against the US. But putting
that aside, the lowest tariffrate in any country the world
faces is ten percent. So we want to fix that

(01:12):
for reputational reasons. But it's not like the shape.

Speaker 1 (01:15):
What if you can't tell? But hre's your problem, Todd.
I mean what you may think is right, they may
not care about can we handle twenty.

Speaker 3 (01:22):
Well no, so we're not facing a twenty percent tariff rate.
We're only facing ten percent. What they've said is that
our the teriffyct US export is face into New Zealand
is twenty percent. Then they've put us on the lowest
band of tariff, which is ten percent. So we're not
going to be having a higher tariff rate than that
it is ten percent. We just want to get the
record right because actually one point nine percent is a

(01:43):
lot different than twenty.

Speaker 1 (01:44):
A lot of people texting me they see they claim
Trump sees GSTBO to all that stuff as a tariff.
Is that part of the calculation? Do you think?

Speaker 2 (01:53):
No, it's not.

Speaker 3 (01:53):
In fact, some things come out overnight. I've just had
a quick report that some wanting a very quick read
of it. It seems what they've done is they're taking
our exports of the US at nine billion dollars, their
imports in New Zealand about eight billion dollars, one billion
dollar difference. Applied that to their exports, which comes to
a twenty percent difference in the value of trade.

Speaker 2 (02:12):
And so they're saying it's twenty percent. That's not a
teriff rate.

Speaker 3 (02:15):
I think what they're actually saying to some countries of
the world is, you know, you you sell us more
than you buy from us. We want you to buy more.
But it's not the way tariff rates are worked out.
And will will will go, I mean ironically and buy
a new airplane the next week or so, or next
month or so, and and you know it'll swing in
the other direction. So we'll make that case to them,

(02:37):
but it won't change the ten percent because that's the
bottom that they're said they're putting on any country.

Speaker 1 (02:41):
So we're buying one or two aeroplanes for the air force.

Speaker 3 (02:44):
Todd Well, I mean, as you know, I went up
to up to Japan with the peer. We stopped in
an aeroplane in pap New Guinea for an extra day,
I'm all in favor of buying aeroplanes exactly.

Speaker 1 (02:57):
Ultimately, where do you think this goes? Is this another
three and a half years of Trump and then will
get the world back in order? Or is this permanent issue?

Speaker 2 (03:05):
Well?

Speaker 3 (03:05):
Look, look, I think over the coming days and weeks,
we're going to see the announcement yesterday change.

Speaker 2 (03:10):
Different countries of the world are going to react to it.
I think we are going.

Speaker 3 (03:14):
To say, see escalation and retaliation of the European Union
is going to put things in place. China, Well, that's
not good for world trade. It's not good for New Zealand. Interestingly,
a number of the exporters I'm talking to now, they're
able to digest it. They're telling me they see more
than just opportunity at market. Some are saying compared to
their competitors who are facing high tariff rates, they might
be able to sell more. And there's an economist in

(03:36):
New Zealand over night saying that actually we could see
our trade grow.

Speaker 2 (03:39):
I'm not sure about that.

Speaker 3 (03:40):
All I'm saying is I think there's a way to
go yet before we see exactly what this meetings. But
if other countries of the world put in place significant terrace.
It is going to be a challenge of the world's
economy and it will be a challenge for New Zealand exporters.

Speaker 1 (03:53):
Just real quick, does it help us out with India?
They got whacked hard. Do we turn up as a
free trader and go, you see those guys, this is
what we want to and they look at us more kindly.

Speaker 2 (04:02):
Yeah.

Speaker 3 (04:03):
I discussed this with the Indian Trade Minister when I
was here a couple of weeks ago, when we launched
the negotiation. We've both agreed a respective of what might
happen around the world with the US, we can push
on and get our deal done. We have capacity on
both sides to be dealing with other nations and to negotiate.
But certainly, you know, I think in as far as
our discussion with other countries about getting barriers down, creating certainty,

(04:26):
it does help.

Speaker 2 (04:27):
Yes.

Speaker 1 (04:27):
Good, have a good week. I appreciate it. Tom McLay,
our Trade Ministry.

Speaker 3 (04:31):
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