NZ to seek exemption on steel, aluminium tariffs: Robertson
New Zealand officials are expected to seek an exemption to new US steel and aluminium tariffs, says Finance Minister Grant Robertson.
US President Donald Trump has used his executive powers — evoking national security risk — to apply tariffs of 25 per cent on steel and 10 per cent to aluminium but said there would be a 15-day window for nations to make an appeal for exemptions.
The move has fuelled fears that it could provoke retaliation by China and the EU, sparking a trade war.
Robertson stopped short of condemning Trump’s move directly but expressed disappointment at the shift in US policy.
“Clearly it’s not the way we want to see world trade go forward,” he said. “There’s been a lot of effort over a long period of time to reduce tariffs. So clearly it’s not a development we favour.”
Trump mentioned both Canada and Mexico — US partners in the Nafta trade pact — and Australia, as a valuable ally that would be considered for exemptions.
He made no mention of New Zealand, which exports about $60 million of steel and aluminium to the US each year.
“I’m sure our government officials will be looking towards an exemption and we need to chase that down. But we also need to understand a bit more about the extent of the tariffs,” said Robertson. “Does it cover materials that aren’t made in the US [by US companies] . . . I know a proportion of NZ steel exports are things that aren’t made in the US.”
Robertson said US developments highlighted the importance of the CPTPP multilateral trade deal that was signed in Chile at the same time as Trump announced his new tariffs.
That would open up a range of
bad in Trumponomics, and a trade deficit is prima facie evidence that the other side has acted in bad faith.
In fact, both sides win in an international transaction, or they wouldn’t do the deal. What’s more, it’s routine for countries to have surpluses with some trading partners and deficits with others.
To be sure, though a deficit with any particular country isn’t a sign of trouble, it isn’t healthy for the US to have persistent deficits with the world as a whole.
Better trade deals could narrow them by breaking down barriers to exports of world-leading US goods and services. Trump is right about new markets for New Zealand exporters, he said.
“Nobody wants a trade war because once you get into retaliatory actions it’s a slippery slope. From a New Zealand point of view our focus is on making sure that if there is the possibility of an exemption we can get that, and on building much stronger trade deals and export markets.”
Last week the EU indicated it could respond by hiking tariffs on US products like jeans, Harley Davidsons and bourbon.
Yesterday Chinese Foreign Minister Wang Yi said a trade war would only harm both sides.
“A confusing situation just got more confusing and uncertain,” said Stephen Jacobi, executive director, NZ International Business Forum. “This is the worst way to conduct trade policy, it flouts WTO rules. It’s not the way to put the world on a path to growth.”
that. But America’s trade deficits also reflect the country’s failure to save enough money to finance needed investments in factories, housing, roads, etc. The trade deficit is the statistical companion of the savings shortfall: The US is borrowing to finance its consumption instead of paying for imports with exports.
On that score, things are getting worse. The Tax Cuts and Jobs Act that Trump triumphantly signed at the end of 2017 will increase the federal budget deficit, which in turn will worsen the national savings shortfall and cause the trade deficit to get bigger, economists say.