1 00:00:00,080 --> 00:00:02,920 Speaker 1: Ten percent. That's the tariff rate that Trump's slapping on 2 00:00:03,000 --> 00:00:06,560 Speaker 1: Key we export stateside. It'll affect the nine billion dollars 3 00:00:06,600 --> 00:00:08,280 Speaker 1: worth of goods that we see in that as our 4 00:00:08,320 --> 00:00:12,320 Speaker 1: second largest market for goods. Of course, there are indirect 5 00:00:12,440 --> 00:00:16,160 Speaker 1: consequences as well through our Asian partners. But right now 6 00:00:16,160 --> 00:00:18,160 Speaker 1: we're going to the Trade Minister Tom McClay. Good evening, 7 00:00:18,160 --> 00:00:21,160 Speaker 1: Minister Ryan Good afternoon. Good to have you on the show. 8 00:00:21,200 --> 00:00:23,840 Speaker 1: So I know you're going to go back and question 9 00:00:24,200 --> 00:00:27,520 Speaker 1: this number in Washington. Have you had any update from that? 10 00:00:28,480 --> 00:00:29,800 Speaker 2: Do you mean the twenty percent? 11 00:00:30,080 --> 00:00:30,600 Speaker 1: Yeah? 12 00:00:31,240 --> 00:00:34,080 Speaker 2: Yeah, So what they've done is when President Trump put 13 00:00:34,159 --> 00:00:36,120 Speaker 2: up with a comparison all the countries that showed that 14 00:00:36,159 --> 00:00:39,880 Speaker 2: New Zealand's tariff rates for exports from the US and 15 00:00:40,000 --> 00:00:43,320 Speaker 2: New Zealand's twenty percent and therefore the ten percent tariff 16 00:00:43,400 --> 00:00:46,760 Speaker 2: levied on us, they have published some more information. Of course, 17 00:00:46,760 --> 00:00:48,959 Speaker 2: it's nighttime there, so our officials will get into its 18 00:00:49,000 --> 00:00:51,880 Speaker 2: first thing when they're away. It looks like what they've 19 00:00:51,880 --> 00:00:54,480 Speaker 2: done is they've taken the amount that we export to 20 00:00:54,560 --> 00:00:58,400 Speaker 2: them minus so the amount that they export to us 21 00:00:58,600 --> 00:01:00,920 Speaker 2: there's a twenty percent different. And they've just said, well, 22 00:01:00,920 --> 00:01:03,240 Speaker 2: that's the difference of the tariff rate, which is not 23 00:01:03,680 --> 00:01:06,160 Speaker 2: our tariff rate for a US selling into New Zealand 24 00:01:06,240 --> 00:01:08,839 Speaker 2: on average is one point nine percent. We face about 25 00:01:08,840 --> 00:01:11,640 Speaker 2: two point two percent up there, but we'll be discussing 26 00:01:11,640 --> 00:01:16,720 Speaker 2: that with them tomorrow and providing some clarity. Irrespective of that, 27 00:01:16,760 --> 00:01:19,160 Speaker 2: the lowest tariff rate they are putting on anybody in 28 00:01:19,160 --> 00:01:21,880 Speaker 2: the world is ten percent across the board, So even 29 00:01:21,920 --> 00:01:24,160 Speaker 2: if we move that number around, it's not clear that 30 00:01:24,240 --> 00:01:27,640 Speaker 2: we would fall below ten percent Australia. Many other countries 31 00:01:27,720 --> 00:01:31,600 Speaker 2: are in the same same category as we are, although 32 00:01:31,600 --> 00:01:33,800 Speaker 2: compared to I suppose the Europeans that are facing a 33 00:01:33,840 --> 00:01:37,320 Speaker 2: thirty four percent tariff rate as challenging as this is 34 00:01:37,360 --> 00:01:40,240 Speaker 2: for our export as they are no worse off when 35 00:01:40,240 --> 00:01:42,959 Speaker 2: it comes to competing its other exports to the US 36 00:01:43,160 --> 00:01:44,080 Speaker 2: as a result of this. 37 00:01:44,400 --> 00:01:46,720 Speaker 1: Yeah, would you call it the best case scenario in 38 00:01:46,760 --> 00:01:47,080 Speaker 1: a way? 39 00:01:47,400 --> 00:01:50,560 Speaker 2: It's Look, it's much better than many countries, most certainly. 40 00:01:51,080 --> 00:01:53,480 Speaker 2: But tariff rates put on New Zealand exports is not 41 00:01:53,560 --> 00:01:53,960 Speaker 2: a good thing. 42 00:01:54,960 --> 00:01:58,560 Speaker 1: Number that's wrong, isn't it. 43 00:01:58,640 --> 00:02:01,600 Speaker 2: So it is wrong, and it is wrong. And as 44 00:02:01,640 --> 00:02:03,600 Speaker 2: far as that is not the tariff rates we put 45 00:02:03,600 --> 00:02:05,800 Speaker 2: in place. I think the highest tariff rate we have 46 00:02:05,880 --> 00:02:07,640 Speaker 2: on anything that the US can send to US is 47 00:02:07,680 --> 00:02:10,240 Speaker 2: about five percent. But it looks like they've used a 48 00:02:10,320 --> 00:02:13,720 Speaker 2: different type of calculation as to balance of trade as 49 00:02:13,720 --> 00:02:15,360 Speaker 2: opposed to tariff rate for some reason. 50 00:02:15,440 --> 00:02:18,080 Speaker 1: But they clearly said on that. You know, the chart 51 00:02:18,120 --> 00:02:21,440 Speaker 1: that Trump held up said New Zealand that the rate 52 00:02:21,600 --> 00:02:26,600 Speaker 1: that America is charged teriff rate. Charge That is wrong, 53 00:02:26,639 --> 00:02:27,000 Speaker 1: isn't it. 54 00:02:27,320 --> 00:02:30,359 Speaker 2: That's that is not correct. That's right. The average the 55 00:02:31,320 --> 00:02:33,840 Speaker 2: average rate that US pays on experts in New Zealand 56 00:02:33,960 --> 00:02:35,120 Speaker 2: is one point nine percent. 57 00:02:35,880 --> 00:02:38,280 Speaker 1: So why are they using this weird calculation on the 58 00:02:38,840 --> 00:02:43,560 Speaker 1: trade deficit and then you know, somehow, somehow relating that 59 00:02:43,639 --> 00:02:44,440 Speaker 1: to a terif rate. 60 00:02:45,240 --> 00:02:47,560 Speaker 2: Yeah, it's really not clear, and that those would be 61 00:02:47,600 --> 00:02:49,480 Speaker 2: one of the things that we're asking officials to sort 62 00:02:49,480 --> 00:02:54,320 Speaker 2: of clarify and discuss with the US. I mean, at 63 00:02:54,320 --> 00:02:56,959 Speaker 2: the one level, what they are probably saying is the 64 00:02:57,040 --> 00:03:00,959 Speaker 2: USS two trillion dollar trade deficit. We want people around 65 00:03:01,000 --> 00:03:04,200 Speaker 2: the world to buy more from US. In fact, in 66 00:03:04,280 --> 00:03:06,360 Speaker 2: the New Zealand economy, the tariff rates are low. There 67 00:03:06,400 --> 00:03:08,959 Speaker 2: are no restrictions as to what you can sell to 68 00:03:09,040 --> 00:03:11,040 Speaker 2: New Zealand from the US or many other countries, and 69 00:03:11,080 --> 00:03:14,080 Speaker 2: so we don't have those barriers. What they've also said, though, 70 00:03:14,200 --> 00:03:16,600 Speaker 2: is I suppose is that there are a group of 71 00:03:16,639 --> 00:03:19,359 Speaker 2: countries where we put ten percent on that's the minimum 72 00:03:19,520 --> 00:03:22,520 Speaker 2: that anybody has. These are countries we are not as 73 00:03:22,600 --> 00:03:25,360 Speaker 2: worried about, or were worry less about. Their focus is 74 00:03:25,400 --> 00:03:28,480 Speaker 2: on Canada and the European Union, in China and many 75 00:03:28,560 --> 00:03:31,120 Speaker 2: other countries of the world, where it ranges from twenty 76 00:03:31,120 --> 00:03:33,760 Speaker 2: percent I think over forty percent in some cases. And 77 00:03:33,800 --> 00:03:36,800 Speaker 2: so you know, as you said earlier, the rates of 78 00:03:36,880 --> 00:03:40,840 Speaker 2: New Zealand has applied against US are better than many 79 00:03:40,880 --> 00:03:42,840 Speaker 2: although a ten percent is still going to be challenging 80 00:03:42,840 --> 00:03:44,600 Speaker 2: from some of our export us up into that market. 81 00:03:44,720 --> 00:03:46,760 Speaker 1: Have you had just funny, have you had any update, 82 00:03:46,760 --> 00:03:49,240 Speaker 1: because I know your officials were working on trying to 83 00:03:49,320 --> 00:03:51,400 Speaker 1: let you know what the economic impact of all of 84 00:03:51,400 --> 00:03:53,480 Speaker 1: this might be. Now that we have numbers, do you 85 00:03:53,560 --> 00:03:54,200 Speaker 1: have a number? 86 00:03:54,840 --> 00:03:57,040 Speaker 2: So they're working through that very very quickly for us, 87 00:03:57,080 --> 00:03:59,160 Speaker 2: because although they did a bit of modeling, of course 88 00:03:59,160 --> 00:04:01,520 Speaker 2: I had to waste and exactly what it'd be. So 89 00:04:01,560 --> 00:04:03,800 Speaker 2: what we see is ten percent across our nine billion 90 00:04:03,840 --> 00:04:07,760 Speaker 2: dollars exports is nine hundred million dollars. But interestingly, a 91 00:04:07,760 --> 00:04:09,600 Speaker 2: lot of this is going to be passed on to 92 00:04:09,800 --> 00:04:13,640 Speaker 2: their consumers. You take the wine that we sell there, 93 00:04:13,840 --> 00:04:16,960 Speaker 2: it'll be ten percent more expensive, European wine thirty four 94 00:04:17,000 --> 00:04:20,479 Speaker 2: percent more expensive. They may consumer less or they may 95 00:04:20,600 --> 00:04:23,000 Speaker 2: end up just paying more. And so you know what 96 00:04:23,040 --> 00:04:27,039 Speaker 2: we do now is tiff rates are inflation, can be inflation. Really, 97 00:04:27,080 --> 00:04:29,960 Speaker 2: they do put up costs for consumers. It's one of 98 00:04:30,040 --> 00:04:32,240 Speaker 2: the reasons that we've been very clear today we're not 99 00:04:32,279 --> 00:04:34,560 Speaker 2: going to retaliate because that would just put up costs 100 00:04:34,560 --> 00:04:36,640 Speaker 2: on New Zealand exporters and drive inflation. 101 00:04:36,720 --> 00:04:38,320 Speaker 1: We mon't be doing that. We can't. I mean, we're 102 00:04:38,360 --> 00:04:40,640 Speaker 1: a small trading notion that could We can't exactly start 103 00:04:40,640 --> 00:04:44,240 Speaker 1: and waking people with terrorists can we well to, But 104 00:04:44,360 --> 00:04:47,840 Speaker 1: I appreciate your time trading For more from Hither Duplessy 105 00:04:47,880 --> 00:04:50,080 Speaker 1: Alan Drive, listen live to news talks. 106 00:04:50,080 --> 00:04:53,280 Speaker 2: It'd be from four pm weekdays, or follow the podcast 107 00:04:53,360 --> 00:04:54,320 Speaker 2: on iHeartRadio.