When the Trump administration arbitrarily imposed 15% tariffs on New Zealand exports on August 1, up from a previously announced 10%, no one should have been surprised.

“Reciprocal” tariffs, based on the difference in value between what the United States imports from and exports to other countries, were signalled on April 2, Trump’s “Liberation Day”. New Zealand’s latest tariffs are higher than some, lower than many.

Many governments are now frenetically seeking deals before the tariffs take effect on August 7. New Zealand’s chief trade negotiator Vangelis Vitalis has been dispatched to Washington urgently to plead New Zealand’s case, with Trade Minister Todd McClay also on his way.

Labour’s trade spokesperson has declared the lack of a deal for lower tariffs – along similar lines to ones struck by the European Union and United Kingdom – a “major fail”.

But politicians should be careful what they wish for. Bigger countries have already caved in to Trump’s demands, signing vague deals at a high political and economic price with no real guarantees.

Trump has a long expressed love for tariffs as leverage over countries that depend on US markets. Essentially, these are taxes the US charges on imported goods.

It’s not New Zealand exporters who “pay” these taxes, it is US importers, and likely their customers. Similarly, New Zealand exporters don’t “save” millions from tariff cuts.

Trump hopes

© The Conversation