Parker: Trade barriers stoke tensions
Trade Minister David Parker is warning a global move to trade barriers could have a destabilising effect well beyond commerce.
On Friday (New Zealand time), US President Donald Trump announced he had decided to impose a 25 per cent tariff for foreign-made steel and 10 per cent for aluminium.
While the move was part of a campaign promise Trump made to steel workers before the 2016 Presidential election, which had been repeated since he won the Presidency, Trump still caught US trading partners by surprise. Global stock markets plunged on fears that other major economies would retaliate. Within hours of the news, European Union trade officials warned they would respond ‘‘firmly’’ if the US president went through with the plan.
New Zealand does export aluminium and steel products to the United States which would likely be caught up in the measures, but the direct impact is likely to be limited.
Trade Minister David Parker told
that he had been advised that New Zealand’s exports of steel and aluminium products to the United States were worth ‘‘tens of millions of dollars rather than hundreds of millions’’ a year.
New Zealand’s Ambassador to the United States, Tim Groser, has already contacted US officials seeking an exemption for New Zealand from the tariffs.
Calculating the impact of the tariffs was ‘‘subjective’’ as it was hard to judge how much of the product would be displaced to other markets, Parker said.
According to the Ministry of Foreign Affairs and Trade, New Zealand’s exports to the United States were worth around $8 billion in 2016.
Parker said the more worrying development was the existing trend towards more trade barriers and the risk that the US move escalated into a trade war.
‘‘Even before this [US episode], my officials were advising me that there were tens of thousands of non-tariff barriers that are slowly being implemented in different countries around the world, so that trend is clear.’’
New Zealand would not retaliate by adding trade barriers, Parker said. ‘‘We will be taking a moderate line’’ by reminding trading partners of the benefits of trade.