At about 9am today, US President Donald Trump will take to the famous White House rose garden and announce his administration’s tariff plans for countries that export goods to the United States.
Trump is calling it “Liberation Day”. According to Trump’s press secretary Karoline Leavitt, the entire Cabinetwill be present to announce a “tariff plan that will roll back the unfair trade practices that have been ripping off our country for decades”.
Beyond that, we know almost nothing.
“The first point to make is that we don’t know anything,” said Stephen Jacobi, a former diplomat who is now executive director at Jacobi Consulting.
He said Trump will have received the trade advice he ordered earlier this year on what he alleges are unfair trade practices that have harmed the US economy.
A report, published by US Trade officials detailing these unfair practices devoted a page to New Zealand. This singled out the issue of import restrictions placed on pork that is imported into New Zealand, which faces some barriers. According to the report, frozen or chilled pork products weighing more than 3kg must be cooked, canned, or undergo further processing within New Zealand.
The Government said that while there are phytosanitary requirements placed on pork entering New Zealand, pork imports from the US were still running high, suggesting the barriers were not onerous.
New Zealand Trade Minister Todd McClay said the Government was “well prepared”, but admitted New Zealand officials seemed to know about as much as everyone else.
“As you’ll see from speculation of media around the world. No one knows what’s likely to happen until about 9 o’clock New Zealand time tomorrow morning,” McClay said.
“Both at official level and ministerial level, we’ve had a lot of engagement with the US administration. We’ve been making the case of how complementary the trade is and it’s well balanced,” he said.
McClay said he had sought advice on the difference between tariff rates applied to US goods entering New Zealand compared with exports going the other way. The Trump administration is frustrated that many countries have higher tariffs on imports from the US than it places on goods entering its economy.
Trade Minister Todd McClay has been in "wait-and-see" mode like the rest of the world. Photo / Andrew Warner
McClay said this was not the case in New Zealand, which has dramatically reduced tariffs since the 1980s.
According to a report from the US, New Zealand’s average most-favoured-nation (MFN) applied tariff rate was 1.9% in 2023. New Zealand’s average MFN applied tariff rate was 1.4% for agricultural products and 2% for non-agricultural products in 2023.
As of 2023, New Zealand applied a 0% duty on an MFN basis on 72.5% of its tariff lines in agricultural goods and on 65.1% of its tariff lines in non-agricultural goods.
McClay said there were “about 20″ areas where tariffs applied by New Zealand were higher than those applied by the US in a “consequential” way. He said they were predominantly in the area of food.
“There’s not a significant difference, I think, from memory, US exporters to New Zealand face on average about a 2% tariff rate, we are higher on the other end – so none of them are large,” he said.
“What I’ve asked for is a lot of detailed work across the board of every single tariff line to see where there are differences and compare that to if there is meaningful difference in trade.”
McClay said whatever happens, the “likelihood that New Zealand will be impacted is becoming evident”.
This could be because of tariffs on New Zealand or the domestic market being impacted by tariffs on other countries.
McClay said that as was seen with steel and aluminium tariffs applied during the first Trump administration, levies enforced across the board could ensnare New Zealand exports, even if the country was not singled out.
Jacobi said this was one of the ways New Zealand might be impacted. He thought it unlikely that the US could afford to be surgical with tariffs, applying them to specific goods from specific countries, given the variety of items imported to the US from a number of countries.
“I don’t think he’s targeting New Zealand for a second. Yes, we have a small trade surplus, but buy a couple of planes and it’s gone,” Jacobi said, referring to the fact a few substantial purchases of items like aircraft from the US would shrink the surplus.
“I don’t think we’re really who he’s thinking about. The barriers, the ‘trade irritants’ [regarding New Zealand], as revealed in the US Trade Representative’s report yesterday were barely a paragraph,” Jacobi said.
Trump’s previously stated view of trade is to disapprove of countries that run trade surpluses against the US, such as New Zealand. In the year to December, exports to the US were slightly over $16 billion.
Imports from the US were $12b, giving a trade surplus in our favour of $4b.
McClay did not give any indication of what New Zealand might do to respond to Trump’s threats.
One problem is that while New Zealand’s tariff rates are low and therefore could be dropped without causing too much damage to the economy or the Government’s revenue, having the tariffs can be useful in trade talks because they give officials something to trade away.
McClay said Cabinet would “have to be mindful” of future trade deal implications when it chose how to respond, but he said New Zealand tariff rates were so low they were usually not the sticking point in negotiations.
Jacobi said there had been some speculation in the US that there would be a 20% universal tariff.
“If it were at 20%, it would be at the upper level of pain for New Zealand exporters. If it were 5-10% it would be at a lower level of pain.
“If it’s above 20%, you’re talking about very serious pain indeed,” Jacobi said.
Thomas Coughlan is deputy political editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.
