Trade minister says Trump may impose 15% or even 20% tariff as deadline expires today
Trade Minister Todd McClay said initial indications show US President Donald Trump might slap a 15% tariff across the board, but he also isn’t ruling out a 20% tariff baseline to be imposed.
Trump announced the tariffs during the Liberation Day speech back in April, saying he would impose sweeping tariffs on more than 125 countries.
He’s indicated he’ll raise the baseline tariff faced by most countries, including New Zealand, from 10% to 15% or even 20%.
The US President has since reached 11 deals, and agreed to pause tariff increases for Mexico, ahead of his deadline of 4pm today New Zealand time.
McClay said there was not “enough detail” in the releases about the deals being made with other countries to know with certainty what would take place.
He told Newstalk ZB’s Mike Hosking Breakfast he does not know for sure what will happen this afternoon; however, he had been having “constructive” conversations with his US counterpart, Jamieson Greer.
“It’s been extremely constructive. Our embassy is talking all the time. But, you know, it’s not sure.”
McClay disputed claims that New Zealand would be “worse off” than others, as the expected tariff would be the bottom level of the others handed down.
“If others are below that, whatever the new rate is, then it would be hard,” he said.
“What we are seeing from our exporters is, in some cases, more demand, they’re selling more.
“Many have just passed that tariff on, so it means higher prices for the US.
“Others are actually saying, well, I think Europe’s a better market. There’s more certainty, and we’re getting better prices.
“I want to be clear, you know, tariff rates and escalation are not good for the world economy, and ultimately it’s not good for consumers.”
This week, Trump posted on Truth Social that the August 1 deadline “stands strong, and will not be extended”.
White House Press Secretary Karoline Leavitt says all governments - including our own - should have heard from them by 4pm.
“The trade team have been working around the clock to be in correspondence with as many countries as possible.
“If they haven’t heard from us yet, they will in the form of a letter or an executive order.”
The New Zealand sharemarket fell sharply in the opening minutes of trade after Trump’s tariff announcements.
By late morning, the New Zealand dollar had dropped by about half a US cent to US56.90c on the news.
In the most recent round of tariff threats, the US President said he would impose a 35% tariff on Canadian imports, and that could creep up if Canada retaliates.
He also announced 30% tariffs on all imports from Mexico and the European Union, after negotiations failed.
This week, Trump hit India with a 25% tariff and “penalty” over Russia ties, with the measures kicking in today.