New Zealand PM Christopher Luxon doesn’t expect to win US tariff reprieve

WELLINGTON – New Zealand Prime Minister Christopher Luxon has conceded the government is unlikely to win a reduction in the tariff rate the US has applied to New Zealand goods.

Officials were taken by surprise when the US on Aug 1 announced

New Zealand imports would be hit with a 15 per cent tariff

– up from the 10 per cent initially signalled and higher than some of its competitors such as Australia and Britain, which are at 10 per cent.

In response, New Zealand said it would seek a reduction and dispatched a senior trade official to the US, with Trade Minister Todd McClay expected to follow in coming weeks.

However, speaking to Radio New Zealand on Aug 11 in Wellington, Mr Luxon said he did not expect to win a reprieve.

“Essentially for us, it’s really about making sure that we have an ongoing dialogue with the Americans,” he said.

“I don’t think it’s going to change our situation in a tariff sense, the President and the administration are pretty set on that.”

The US is New Zealand’s second-largest export customer, buying NZ$9.3 billion (S$7.1 billion) of goods in the year to June.

Imports from the US were worth NZ$8.7 billion, creating a small trade surplus for New Zealand.

New Zealand has argued that the surplus is not meaningful and that two-way trade between the nations is largely balanced.

Finance Minister Nicola Willis last week played down the economic impact of the increased US tariff rate, saying “in terms of the overall economy, this is not a big shock, it’s a small one”.

The main opposition Labour Party said the increased tariff was a “major fail” for the government when other nations had managed to cut a deal. BLOOMBERG