Tim Groser: Former Trade Minister and Former ambassador to the US on Trump's proposed tariffs on imports

New Zealand business wait with bated breath to find out who will become president in the US. 

It currently seems that Trump will take the win. He has promised big tariffs on goods from overseas.  

Former Trade Minister and former NZ ambassador to the US Tim Groser tells Heather du Plessis-Allan the Democratic party’s cardinal mistake was fronting a candidate that was “never going to succeed in presenting herself as a candidate for change”. 

Groser says Trump will try to move ahead with tariffs quickly, but there are problems he will be completely unaware of – like the pass-on effect of cost to American consumers. 

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Episode Transcript

Speaker 1 (00:00):
New Zealand businesses are waiting with bated breath to see
who's going to become the president in the US, and
obviously it looks like Donald Trump is going to take it.
Tim Grosser is a former trade minister and former ambassador
to the US and with US now. Tim, thanks for
being with us.

Speaker 2 (00:12):
I really appreciate it. Pleasure.

Speaker 1 (00:14):
Do you see this coming?

Speaker 2 (00:16):
Well? I saw the data and studied the data very
very carefully, and in particular the ninety three electoral College
votes in the seven swing states, all of which had
up until about a week ago, Trump marginally leading, and
for sophisticated reasons that political scientists much better in form

(00:37):
than me could tell you a consistent tendency to underestimate Trump.
I thought it was more likely he would win. But
I didn't say it's going to be a Trump walkover.
But I thought the numbers implied what appears to be
playing out on the screen. The other broader point I've
been making is, you know, you can you can do
a granular dive into data in elections, or you can

(00:59):
look at the bigger picture. And to me, the issue
is if you are the incumbent and the underlying mood
of the New Zealand electorate or the British electorate or
the American electorate. Is this is no time to change horses.
You're in good check. If it's throw the bums out,
you're in trouble no matter who you are. And I

(01:20):
have used this analogy, real world analogy before. I asked
my father when I was eighteen years old and he
was old enough to vote. He was born in London,
old enough to vote for the first time in nineteen
forty five, and Winston Churchill was standing on his record.
You cannot get a better record for an incumbent than
having saved Western civilization. I'm sorry, so I said, Dad,

(01:41):
did you vote for Winston? And he said, ah, no,
We were appreciative of what Winston had done, but we
wanted change. So my argument has been to a few people,
if Winston Bloody Churchill cannot withstand the mood will change.
No politician can. I mean, I think there'll be some

(02:02):
really interesting and bitter stuff happens within the Democratic Party
as this unfolds if he wins. But the cardinal mistake
they made was to screw up the selection process and
put in a candidate that was never going to succeed
in presenting herself as a candidate to change.

Speaker 1 (02:20):
You think they should have had I had an open contest,
not just to.

Speaker 2 (02:23):
Yeah, but I mean, look, we'll wait and see how
this pans out in terms of the internal debate in
the Democratic Party. But the original mistake probably is about
two years ago. Because I agree that Gavin Newsom, the
governor of California, and the person that I think has
got amazing political talent in the United States, who is
Gretchen Whitmore, the governor of Michigan. I mean, either of

(02:47):
those would have been able to present it as a
brilliant candidate, a candidate of change without dumping all over
the Biden administration. They never had a chance. After the
debut of the Trump Biden debate.

Speaker 1 (03:00):
Back with Tim Gross, a former trade minister, former ambassadors
to the US. Tim, So, let's assume that Donald Trump
becomes the president. Most likely outcome at the moment he
has the Senate, he also has the House. He can
do everything he wants. Does he go ahead with the
tariffs quickly?

Speaker 2 (03:13):
Well, he'll certainly try. There are massive problems which he,
of course is completely unaware of. I mean, I simply
don't believe for one minute he can implement the full
force of what he's proposing, which will be utter madness
and do enormous damage to the American people if he
tried to do it. Don't forget this. Fifty percent of
the imports coming into the United States are what are

(03:34):
called intermediate goods, meaning it ain't sort of sausages and
cell phones. It's the things that go into make sausages
like New Zealand meat, and the things that go in
to make handphones. And you increase the price of those,
what the hell do the companies who are buying these
so called intermediate goods do. They'll pass the costs on,

(03:56):
of course they will, And the idea that suddenly there's
going to be American comfant copanies will say, oh, we
can produce all the bits that go into the handphone.
Do you really think commercially they're going to take that
risk when they know the retaliation coming down? So this
is this is not going to work. But as he
follows this absurd policy, you can break a lot of

(04:16):
stuff in the process.

Speaker 1 (04:17):
Do you think, though, that he's open to having to
being changed on it?

Speaker 2 (04:20):
Does he trying? Yes, yes, he is open and this
is I mean, the classic example of this is you've
got this gigantic FTA called the NAFTA that unites the Mexican, Canadian,
and US economies, and over twenty years, supply chains have
grown up of great complexity. Trump becomes the President's with

(04:41):
the same protectionist mindset, says this agreement is the worst
agreement that mankind has ever seen on the planet. I'm
going to smash it. Then he gets kunter pressure from
Justin Trudeau and from the Mexicans. Then he's forced to backtrack.
A renegotiation takes place, which is now quote, the greatest
trade agreement that has ever been negotiated, eighty five percent

(05:05):
of which is identical to the old one. So in
that sense, yes, you are right. He will face a
lot of pushback, not just externally but internally to this.
So I think the net how I net this out?
It's all bad. It's not going to be literally the
full Monty that he's put on the table. But there's

(05:27):
no good can come out of this. It's just a
question of how bad is it going to be on there.
But look, that's not my overarching concern right now. My
overarching concern is much bigger than trade and economics, which
is what it's the international security situation, because so.

Speaker 1 (05:42):
He delays bad things happen.

Speaker 2 (05:44):
But first of all, we've got a massive immediate problem
on our hands if he's the president, because everyone knows
that's where the US is going under a Trump administration.
And we've got two months of the lame duck period
where technically the gravely we can biden Harris presidency is
still in charge of the United States. Meanwhile, we've got

(06:05):
a war in Europe and a war in the Middle East,
which are the most serious wars that we've seen threatening
global peace and stability in seventy years in my personal opinion. So,
and the other thing is this, Heather, that both of
the key to decision makers Putin and Nitnya, who are
watching Trump above or else for their decision, do I

(06:27):
escalate or do I negotiately?

Speaker 1 (06:28):
Not Tim, thank you will have to leave it there.
I could talk forever with you, Tim Grosser. Headline's next.
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