The US is set to impose new tariffs ranging from 10 to 12.5 percent on 60 economies, including New Zealand, as the Trump administration looks to rebuild its tariff regime.
New Zealand and Australia face a 12.5 percent tariff, while major trading partners including China, the European Union, Japan and South Korea were also targeted.
It comes after the US Supreme Court ruled the administration’s previous so-called Liberation Day tariffs were illegal. The new levies replace the temporary Section 122 tariff imposed after that court decision, due to expire on 24 July.
US Trade Representative (USTR) Jamieson Greer claimed the new tariffs were designed to combat imports made with forced labour – a claim previously rejected by New Zealand.
The new tariffs are set to come into effect from just after 4.01pm (New Zealand time) on Friday.
The US government’s notice said New Zealand’s tariff rate was based on USTR’s findings from its investigation into New Zealand.
Trade policy consultant Charles Finny said the decision was not a surprise.
“This is exactly as we were anticipating,” he said.
Finny said there was still uncertainty over how long the tariffs would remain in place, particularly if they were challenged in US courts.
“I think exporters should be planning on these 12 or 12.5 percent tariffs applying for many months,” he said.
In a statement, Greer said: “President Trump recognises that decades of moral suasion have not eradicated forced labour from global supply chains.
“The United States has had a forced labour import ban for nearly a century, and rigourously enforces it; it’s well past time for our trading partners to do the same.”
The Trump administration agreed to impose lower 10 percent tariffs on countries it claimed had committed to impose a forced labour import prohibition. They included Argentina, Bangladesh, Canada, India, Indonesia, Malaysia, Mexico, Pakistan and the UK.
Finny said the United States remained a good market for many exporters, but the higher tariff would make conditions tougher for some.
“For some exporters, it will be even tougher now with a 12.5 percent tariff, and they will be looking for new markets,” he said.
He said New Zealand had options because about 80 percent of exports were covered by free trade agreements.