WELLINGTON, Aug. 1 (Xinhua) -- New Zealand faces a sharp rise in tariffs on its exports to the United States, a move officials warn could impact Kiwi exporters and strain trade relations.
Amid a "modest" trade surplus with the United States, New Zealand is facing a sharp increase in U.S. tariffs on its exports from 10 percent to 15 percent starting Aug. 7, according to a New Zealand government statement on Friday.
New Zealand Trade Minister Todd McClay said the tariff hike is based on U.S. calculations of trade surpluses, even though New Zealand's surplus is modest -- about 500 million U.S. dollars -- and not significant in the context of the U.S. economy.
"Over the past decade, our trade relationship with the U.S. has seen periods where the U.S. enjoyed a significant surplus and times, like now, when New Zealand has a modest one," McClay said, adding the bilateral trade remains "balanced and complementary."
The minister warned that the higher tariffs will seriously impact New Zealand exporters sending about 9 billion NZ dollars (5.28 billion U.S. dollars) in goods to the United States each year, saying a 15 percent rate will be much harder for companies to absorb or pass on than the previous 10 percent.
McClay said he will urgently seek talks with the U.S. trade representative, noting U.S. exports to New Zealand face a much lower average tariff of 0.8 percent.
"Our focus now moves to engaging directly with the U.S. on this current announcement to seek changes to this decision," he said, reaffirming New Zealand's commitment to open, rules-based trade and strong bilateral ties.
New Zealand Finance Minister Nicola Willis told the media that New Zealand has been hit by a "very blunt formula."
"This is a disappointing development. New Zealand and the U.S. have a deep, long-standing friendship and U.S. exporters already facing much lower tariffs exporting to New Zealand than goods going the other way," Willis said. Enditem
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