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Exporters Need 'Certainty', Not 'See-sawing' Tariff Rate, McClay Tells Us
Trade Minister Todd McClay says he's prioritising certainty on the US tariffs before trying to negotiate a reduction.
He met with senior officials in Washington last week to express his concerns about the 15 percent tariffs imposed on New Zealand exports.
Prime Minister Christopher Luxon has said there's no suggestion that US President Donald Trump will budge on the tariffs on New Zealand exports.
McClay told Morning Report he wasn't expecting to get the tariff rate off as the President had made it clear that any country with a surplus - albeit modest - would be subject to a 15 percent tariff, or higher.
He said currently, it was the fluctuating nature of the rate which was more harmful to exporters than the rate itself.
"The challenge we have is, it's gone to 15 percent, will it go down to 10 percent? Could it go back to 15 percent again?
"We've asked for some certainty of whether there's a process or not and how we can work with them to get a bit more of that, so at the very least our exporters know what they're getting into and if they want to put more effort into the US."
McClay said the plan to purchase five MH-60R Seahawk helicopters and two Airbus A321XLR aircraft from the United States was announced while he was in Washington.
He said he pointed that out, while making the case that trade between the countries was "actually very balanced".
For six of the past 10 years, the US has had a "significant trade surplus against us, in the last four we've had a very modest one," he said.
"So, that's registered ... the message was, 'You're [New Zealand] not in our sights, but we're sorry you're a bit of collateral damage here'."
McClay said he'll continue to meet with his US counterparts over the coming months to discuss how those trade flows could impact the rate.
The tariffs were unavoidable and most of the world was trying to negotiate with the US.
He made it clear that most of the tariff was being passed on and that it was "inflationary for US consumers, but it's starting to bite".
"Any further movement is going to harm trade significantly, and then secondly the see-sawing" was harmful to New Zealand exporters.
McClay said most countries had responded to the uncertainty with US trade, by making efforts to reduce trade barriers elsewhere and give certainty to exporters.
"I haven't seen any evidence yet of others saying, 'We'll retaliate against everybody and put tariff rates up'.
"In our engagement with countries we trade with, or want to trade more with, ... the conversations are more positive than they were previously."
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