Government responds to tariff shock as Labour accuses it of ‘major fail'
In April, US President Donald Trump announced proposed tariffs on America's trading partners including a 10% tariff on New Zealand.
That base tariff has been increased to 15%. Other countries, like Australia and the United Kingdom have secured tariffs of 10%.
McClay earlier told RNZ the higher rate could be because New Zealand has a trade surplus with the United States, meaning we export more than we import.
He said the Government will try to push back on the higher rate.
McClay and Willis are scheduled to speak on the matter at 4.15pm.
However, Labour pointed the finger at the Government, with trade spokesman Damien O'Connor saying the episode was 'a major fail for the Government and for our relationship with the US'.
'Christopher Luxon has failed to secure a low tariff rate for our exports, while others around the world such as the EU and UK have managed to make a deal,' he said.
'Businesses will have to decide whether to pass the costs on to American customers, or weather those themselves. They may have to explore new markets. None of these options are good for business confidence here at home,' he said.
Deputy Prime Minister and Act leader David Seymour said the tariffs were 'a choice' for the American Government.
'Our choice is to continue expanding to new markets with new trade deals,' he said.
Seymour said New Zealand believes in free trade and would continue to advocate for low tariffs around the world.
'We can't control other countries' policy at the end of the day. We can seek new markets and new trade deals,' he said.
Seymour would not say whether he believed the tariffs would be inflationary.
'There is so much going on in the world economy. One person's reckons are probably not worth the paper they're written on. There are things we can change, there are things we can't change.
'We can't change other countries' political choices, that's their right to make, what we can change is that this is a place that's good to build a business, things that people will beat a path to our door for, rather than us begging them to open theirs,' he said.
Trade expert Stephen Jacobi said the tariff was unjustified at 10%.
'And it's now even more unjustified.'
'We impose very few tariffs on the United States.
'They have no major trade issues with us.'
He said the impact of the revised tariff regime on New Zealand exports would depend on the individual sector.
'I think it's going to depend, of course, but there may be some water to flow under the bridge on this.'
Today's statement from the White House said the Australian tariff would stay at 10%.
'Britain obviously is at 10%, but we don't really compete directly with them,' Jacobi said.
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