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Speaker 1: Questions, answers, facts, analysis, the drive show you trust for

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Speaker 1: the full picture. Heather d Pussy on Drive with one

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Speaker 1: New Zealand let's get connected news talks.

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Speaker 2: That'd be good afternoon. In something of a shock today,

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Speaker 2: we have been slapped with a fifteen percent tariff, up

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Speaker 2: from the ten percent we were expecting the Trump administration

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Speaker 2: administration to hit us with. Meanwhile, Ozzie has still managed

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Speaker 2: to stay on ten percent. Todd McLay is our trade

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Speaker 2: minister and with us. Hey Todd, Hey, Heather, what happened?

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Speaker 2: Did we do something wrong?

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Speaker 3: Well, no, we didn't.

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Speaker 4: I think it's just a very blunt formula that the

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Speaker 4: US president, President Trump has used. He's asked for a

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Speaker 4: list of all the countries that they have a trade

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Speaker 4: deficit with, ie, we sell them marginally more than we

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Speaker 4: buy from them, and he slapped fifteen percent or more

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Speaker 4: on those sorts of countries. Interestingly, Australia buys a lot

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Speaker 4: more from the US than they sell them and even

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Speaker 4: they got that ten percent last time. So it is

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Speaker 4: disappointing and challenging for some of our exporters. But there's

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Speaker 4: still opportunities in that market all but tariff rates are

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Speaker 4: not good for trade.

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Speaker 2: Yeah, Were you guys too relaxed about this? I mean,

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Speaker 2: could you have tried to do something like the Aussies

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Speaker 2: did lifting the beef band, something like the South Koreans did,

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Speaker 2: offering to buy huge amounts of allergy.

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Speaker 4: Well, no, South Korea has a fifteen percent as well

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Speaker 4: in twenty country. Yeah, but it's still fifteen percent as

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Speaker 4: opposed to as opposed to others, so they've got to

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Speaker 4: deal with there. There's been a lot of engagement. I

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Speaker 4: think you've seen Winston Peter's up in the US. I've

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Speaker 4: met with my counterpart a lot. Our officials have been

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Speaker 4: talking a lot, and you know, we've been working through this.

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Speaker 3: But ultimately, there are countries there that.

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Speaker 4: Actually have been engaging and negotiating and the same things

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Speaker 4: happened to them.

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Speaker 3: I think it is just a blunt formula.

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Speaker 4: You know, the President has been saying for a number

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Speaker 4: of weeks, you know, he's going to be lowering the

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Speaker 4: bottom tariff rate, and he has done that. Although you

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Speaker 4: are right, there's a couple of countries that, it seems

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Speaker 4: haven't had that happen to them. We've put in a

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Speaker 4: request for renurgent with my counterpart to be raising some of

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Speaker 4: these challenges and concerns and ask what we do from here,

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Speaker 4: because we would like to get that teriff fright back down.

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Speaker 4: But ultimately, I think what happens is the President of

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Speaker 4: America makes decisions and their system follows.

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Speaker 2: Are you saying there are a couple of countries who

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Speaker 2: you would have expected to see go up to fifteen

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Speaker 2: percent and it hasn't happened.

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Speaker 4: No, I'm saying there are some countries that have negotiated,

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Speaker 4: have got deals that have been on fifteen percent, and

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Speaker 4: again it's just those gone down to ten.

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Speaker 3: Yeah.

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Speaker 4: No, nobody's gone down to ten that I'm aware, unless

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Speaker 4: it had already been has already been announced. No, No,

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Speaker 4: what I'm saying the other way around, there are countries

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Speaker 4: that when it goes in and got deals and they.

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Speaker 3: Still face ten percent as we do.

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Speaker 4: And again it's just based upon whether or aren't you

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Speaker 4: bio sell more from the US to our trade deficit

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Speaker 4: with them as about five hundred million US dollars, and

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Speaker 4: you know that in the scheme of things of their economy,

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Speaker 4: it's just not significant at all.

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Speaker 3: It's not that long ago.

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Speaker 4: Actually, they had a very big trade surplus against US,

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Speaker 4: and well again quite and others are looking to buy stuff,

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Speaker 4: and so this stuff swings around a little bit. That's

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Speaker 4: the case we'll be making. But we'll be saying, look,

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Speaker 4: this is unreasonble, it's unfair. We didn't like the ten percent.

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Speaker 4: This is going to be harmful for US consumers as well.

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Speaker 4: The price gets passed on largely. And you know we're

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Speaker 4: making that case very very quickly.

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Speaker 2: God, how much trouble in particular are our beef exporters in.

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Speaker 3: Well, that's a very interesting one.

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Speaker 4: The US doesn't have enough beef and they must import

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Speaker 4: because they don't produce enough of their own. So Australia

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Speaker 4: does have a lower tariff rate than we do. But

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Speaker 4: if you go back before the first announcement of the

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Speaker 4: ten percent, Australia was at zero because they have a

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Speaker 4: free trade agreement.

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Speaker 3: So in the past in other markets.

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Speaker 2: Yeah, but I don't know that any of this is

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Speaker 2: important because what we've got right now is Australia ten percent,

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Speaker 2: Uruguay ten percent, Argentina ten percent. Big beef exporters write

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Speaker 2: us on fifteen percent, Who's going to buy ours when

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Speaker 2: they can buy the beef from those countries and it's

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Speaker 2: good stuff.

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Speaker 4: Well, I guess the point that I'm making is previously

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Speaker 4: we've either been at the same or we have had

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Speaker 4: better at access with that market, and they still do.

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Speaker 4: The thing that I'm told about our beef exports, number

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Speaker 4: one is that the majority of exports have been able

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Speaker 4: to pass that ten percent on. They'll need to look

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Speaker 4: at what that means with their contract and some of

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Speaker 4: they have said to me they'll be able to absorb

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Speaker 4: the extra five percent so they can still be in

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Speaker 4: that market. And the reason for that is actually, you know,

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Speaker 4: we're very efficient producers they need to keep.

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Speaker 2: By God, if you compare ourselves to those three countries,

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Speaker 2: we're at a disadvantage now, aren't we.

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Speaker 3: No question?

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Speaker 4: Well the answer is no question at all. But we

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Speaker 4: have been against Australia as a disadvantage for tour before,

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Speaker 4: and we've also increased our access to that market to export.

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Speaker 4: So sorry, I'm not trying to paint the picture that

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Speaker 4: this is good news.

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Speaker 3: It's not.

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Speaker 4: But our exports are very good in the nimble and

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Speaker 4: I do think that the beef market, although it's going

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Speaker 4: to be challenging or need to be worked through, they're

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Speaker 4: still going to be good access and there for us

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Speaker 4: We'll be talking about that though, with the EU, with

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Speaker 4: the US, because it doesn't actually make sense when you

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Speaker 4: need product from around the world, but somebody has a

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Speaker 4: good trading nation has very very low tariffs against your exporters.

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Speaker 4: You know that you're putting the starts against them.

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Speaker 2: Okay, mate, listen, good luck with it and thanks very

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Speaker 2: much for talking to us. It's Todd McClay, Trade Minister.

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