April 3, 2025 • 6 mins
The Minister of Agriculture and Trade has had one day to unpack and digest "Liberation Day". So, what do the Trump tariffs mean for New Zealand farmers?
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Speaker 1 (00:00):
Tod McLay is the Minister of Agriculture and Trade. He's
had one day to unpack and digest Liberation Day. Todd,
let's cut to the chase here. What is this going
to mean for New Zealand farmers.
Speaker 2 (00:11):
Well, it is for much of what we sell into
that market, Jamie, ten percent more on the tariffs that
are already playing so quite tougher. Butter for beef, it's
just slightly more than ten percent will be the tariff rate.
Tariffs are not good for New Zealand, so that's concerning. However,
we are no less competitive against other exporters in that
market because everybody in the world is facing an additional
ten percent and many countries as many as forty their
(00:34):
tariff rates are much much higher than that. So what
I'm starting to hear from our exports is they are
looking at the detail of it is although they're going
to have to find ways to meet that ten percent
extra cost, some of which will be passed on or
a lot will be passed on to us consumers, they
are seeing there could be opportunities and some products in
there to sell more ironically, and so we're going to
(00:56):
continue to look at what it means to get more
information over the next day or so as the you know,
the US administration starts releasing more detail of you know,
yesterday's speech and announcement.
Speaker 1 (01:07):
On the face of it, okay, we've got nine billion
dollars worth of trade from New Zealand to the US.
That equates to obviously a nine hundred million dollar tariff.
I think we can live with that, Todd. But what
about the collateral damage to some of our biggest trading partners, China,
the EU.
Speaker 2 (01:25):
Yeah, yeah, that's right. It's going to be quite tough
for them. I'll cover that a moment. Just on that
nine hundred billion dollars. Yes, that's just an up and
down figure of ten percent of nine billion dollars worth
of exports. But I think a lot of that is
going to be taken up by the US consumers. Think
about the beef we sell in that it's a very
important beef market for US. Two things happen. We sell
very high end beef into restaurants and a lot more
(01:48):
as ground. It goes into the hamburgers. You know, if
you go to a restaurant in New York and you
get one hundred dollars steak meal and it's New Zealand
beef in that restaurant. You know, the beef might be
fifty dollars. Ten percent of that your meal is going
to be one hundred and five dollars. That is going
to get passed on. So it's going to be inflationary.
And I would be worried if others had a lower
(02:09):
tariff rate than us, but they don't. It's the same.
And by the way, Australia is not selling any beef
at the moment because you've put a restriction on that,
and so you know, there is going to be opportunities
there for us in those markets, but it's going to
be a bit harder work and challenging. Jamie, you mentioned
the other places, the EU and China. I expect we're
going to see tariff escalation and retaliation from there. That
(02:31):
is concerning for us. We won't get caught in that,
but it's going to have an impact upon their markets.
You know, will there be a slowdown in their economies?
You know, will there be uncertainty consumers may step back
a little bit. But incidentally, with beef again, China has
already had tariffs put in place against America. They're not
importing American beef at the moment. I'm told anecdotally some
(02:54):
of our beef exports to China are telling me they're
getting calls from their customers wanting more beef at the
moment because Chinese consumers still want the stake in the
restaurant on the supermarket shelve, so they're going to look
elsewhere in the world. If there is a big fight
brewing with the US and US not selling products anywhere.
Speaker 1 (03:12):
Have you had any luck of getting to the bottom
of the supposed twenty percent tariff we impose on the US,
Todd McLay.
Speaker 2 (03:19):
It's wrong. We don't, so that is a mistake. Although
I see overnight. I woke up this morning with reports
coming to me out of Washington from our embassy that
the US is clarified. What they've done is that that's
a trade deficit. What they've done is they've said, you,
we buy from you twenty percent more than we sell you. Therefore,
we've decided that's a tariff, which is not. The New
(03:42):
Zealand tariff rate on average for US products and to
New Zealand is one point nine percent, and in the
other direction, the average for US and to the US's
about two point two percent. Now, arguably, I suppose Jamie
is if the President had put that up. You know
that the New Zealand tariff rates are lower than the
US tower than the US tariff rates, we're going to
(04:02):
you a ten percent. It didn't look good. They're talking
about a trade deficit and that will change because we're
going to be buying things from them soon. You know,
New Zealand needs more airplanes in New Zealand world that
goes around there are much of the time we buy
more than we sell at the moment the other way around.
My officials over the night have reached out and been
in contact with the USTR, the Trade office there to
(04:26):
say it's wrong, and I will be writing to my
account about ambassad degree respectfully to saying actually, this is
what the tariff rates are. It's not twenty percent.
Speaker 1 (04:34):
You're all mate. Winston Peter's final question here on yesterday's
show said it was a victorious stay in New Zealand
with there just as well as any country on Earth.
But let's face Todd McLay, anything that that doesn't free
up trade, or makes trade more difficult or more regulated,
is not good for a free trading nation.
Speaker 2 (04:53):
Yeah, that's right. Well, Winston's correct though, because we are
the same as we're better than most countries of the world,
and so actually, you know, our exporters are in a
better position. But he agrees, and I've talked to you know,
he and I'd be talking about this a lot over
the previous week. Anywhere tariffs are put in place doesn't
work for New Zealand and it's not good for us. However,
one last thing I wanted to say, Jamie, to give
(05:14):
you an example. Tariff rates in themselves are not bad
unless they're only against you. So if you take the
Indian market as an example, New Zealand wine exporters face
one hundred and fifty percent tariff rate. Australia, through their agreement,
has a seventy five percent tariff rate. Now seventy five
percent is still far too high for freedom of trade,
(05:34):
but they're selling a lot more Australian wine up there
than New Zealand wine because it's seventy five percent cheaper
than oursers And so in itself that we are at
ten percent across the board and others are the same
or higher. Our exporters in the US market are no
less competitive in fact against the Europeans. You know, we
are ten percent more competitive and others a lot more
(05:56):
than that. And so I back. You know Kree exports,
who are nimble and good at well. They do to
continue to do well in the US market as they
also look around the world for more opportunities, and they'll
keep selling high quality, safe food that's in the farmer's produce,
and they'll keep getting a good return for it.
Speaker 1 (06:11):
Every cloud has a silver lining. Todd McLay, Minister of Trade,
good luck. You're going to earn your keep over the
next few months.
Speaker 2 (06:18):
Thank you so much. We're going to keep working away
at it.
Tod McLay is the Minister of Agriculture and Trade. He's
had one day to unpack and digest Liberation Day. Todd,
let's cut to the chase here. What is this going
to mean for New Zealand farmers.
Speaker 2 (00:11):
Well, it is for much of what we sell into
that market, Jamie, ten percent more on the tariffs that
are already playing so quite tougher. Butter for beef, it's
just slightly more than ten percent will be the tariff rate.
Tariffs are not good for New Zealand, so that's concerning. However,
we are no less competitive against other exporters in that
market because everybody in the world is facing an additional
ten percent and many countries as many as forty their
(00:34):
tariff rates are much much higher than that. So what
I'm starting to hear from our exports is they are
looking at the detail of it is although they're going
to have to find ways to meet that ten percent
extra cost, some of which will be passed on or
a lot will be passed on to us consumers, they
are seeing there could be opportunities and some products in
there to sell more ironically, and so we're going to
(00:56):
continue to look at what it means to get more
information over the next day or so as the you know,
the US administration starts releasing more detail of you know,
yesterday's speech and announcement.
Speaker 1 (01:07):
On the face of it, okay, we've got nine billion
dollars worth of trade from New Zealand to the US.
That equates to obviously a nine hundred million dollar tariff.
I think we can live with that, Todd. But what
about the collateral damage to some of our biggest trading partners, China,
the EU.
Speaker 2 (01:25):
Yeah, yeah, that's right. It's going to be quite tough
for them. I'll cover that a moment. Just on that
nine hundred billion dollars. Yes, that's just an up and
down figure of ten percent of nine billion dollars worth
of exports. But I think a lot of that is
going to be taken up by the US consumers. Think
about the beef we sell in that it's a very
important beef market for US. Two things happen. We sell
very high end beef into restaurants and a lot more
(01:48):
as ground. It goes into the hamburgers. You know, if
you go to a restaurant in New York and you
get one hundred dollars steak meal and it's New Zealand
beef in that restaurant. You know, the beef might be
fifty dollars. Ten percent of that your meal is going
to be one hundred and five dollars. That is going
to get passed on. So it's going to be inflationary.
And I would be worried if others had a lower
(02:09):
tariff rate than us, but they don't. It's the same.
And by the way, Australia is not selling any beef
at the moment because you've put a restriction on that,
and so you know, there is going to be opportunities
there for us in those markets, but it's going to
be a bit harder work and challenging. Jamie, you mentioned
the other places, the EU and China. I expect we're
going to see tariff escalation and retaliation from there. That
(02:31):
is concerning for us. We won't get caught in that,
but it's going to have an impact upon their markets.
You know, will there be a slowdown in their economies?
You know, will there be uncertainty consumers may step back
a little bit. But incidentally, with beef again, China has
already had tariffs put in place against America. They're not
importing American beef at the moment. I'm told anecdotally some
(02:54):
of our beef exports to China are telling me they're
getting calls from their customers wanting more beef at the
moment because Chinese consumers still want the stake in the
restaurant on the supermarket shelve, so they're going to look
elsewhere in the world. If there is a big fight
brewing with the US and US not selling products anywhere.
Speaker 1 (03:12):
Have you had any luck of getting to the bottom
of the supposed twenty percent tariff we impose on the US,
Todd McLay.
Speaker 2 (03:19):
It's wrong. We don't, so that is a mistake. Although
I see overnight. I woke up this morning with reports
coming to me out of Washington from our embassy that
the US is clarified. What they've done is that that's
a trade deficit. What they've done is they've said, you,
we buy from you twenty percent more than we sell you. Therefore,
we've decided that's a tariff, which is not. The New
(03:42):
Zealand tariff rate on average for US products and to
New Zealand is one point nine percent, and in the
other direction, the average for US and to the US's
about two point two percent. Now, arguably, I suppose Jamie
is if the President had put that up. You know
that the New Zealand tariff rates are lower than the
US tower than the US tariff rates, we're going to
(04:02):
you a ten percent. It didn't look good. They're talking
about a trade deficit and that will change because we're
going to be buying things from them soon. You know,
New Zealand needs more airplanes in New Zealand world that
goes around there are much of the time we buy
more than we sell at the moment the other way around.
My officials over the night have reached out and been
in contact with the USTR, the Trade office there to
(04:26):
say it's wrong, and I will be writing to my
account about ambassad degree respectfully to saying actually, this is
what the tariff rates are. It's not twenty percent.
Speaker 1 (04:34):
You're all mate. Winston Peter's final question here on yesterday's
show said it was a victorious stay in New Zealand
with there just as well as any country on Earth.
But let's face Todd McLay, anything that that doesn't free
up trade, or makes trade more difficult or more regulated,
is not good for a free trading nation.
Speaker 2 (04:53):
Yeah, that's right. Well, Winston's correct though, because we are
the same as we're better than most countries of the world,
and so actually, you know, our exporters are in a
better position. But he agrees, and I've talked to you know,
he and I'd be talking about this a lot over
the previous week. Anywhere tariffs are put in place doesn't
work for New Zealand and it's not good for us. However,
one last thing I wanted to say, Jamie, to give
(05:14):
you an example. Tariff rates in themselves are not bad
unless they're only against you. So if you take the
Indian market as an example, New Zealand wine exporters face
one hundred and fifty percent tariff rate. Australia, through their agreement,
has a seventy five percent tariff rate. Now seventy five
percent is still far too high for freedom of trade,
(05:34):
but they're selling a lot more Australian wine up there
than New Zealand wine because it's seventy five percent cheaper
than oursers And so in itself that we are at
ten percent across the board and others are the same
or higher. Our exporters in the US market are no
less competitive in fact against the Europeans. You know, we
are ten percent more competitive and others a lot more
(05:56):
than that. And so I back. You know Kree exports,
who are nimble and good at well. They do to
continue to do well in the US market as they
also look around the world for more opportunities, and they'll
keep selling high quality, safe food that's in the farmer's produce,
and they'll keep getting a good return for it.
Speaker 1 (06:11):
Every cloud has a silver lining. Todd McLay, Minister of Trade,
good luck. You're going to earn your keep over the
next few months.
Speaker 2 (06:18):
Thank you so much. We're going to keep working away
at it.
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