'Not rigorous': Trade Minister Todd McClay rejects US findings behind new tariffs
Friday, 24 July 2026
The United States has imposed a new 12.5% tariff on New Zealand, as US President Donald Trump looks to get around a Supreme Court decision that halted some of his tariff actions.
The 12.5% tariff was expected to replace an earlier 10% tariff and will still exclude a range of goods such as beef and kiwifruit that make up about 30% of New Zealand exports to the US.
The Trump administration has been forecasting that it will make the tariffs under a law that allows it to do so if it believes other nations are failing to “impose and effectively enforce a prohibition on the importation of goods produced with forced labour”. It investigated New Zealand among 60 other countries under this rule and found against the nation.
Trade Minister Todd McClay said the decision was “very disappointing” and the US investigation was just a “legal pretext” for the tariffs.
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“New Zealand rejects the findings of this investigation. The US process was not rigorous. It’s just not credible that imports created with forced labour play any measurable role in New Zealand’s economy,” McClay said.
“New Zealand engaged in the process in good faith and made our position clear to USTR and the US State Department. The investigation just provides a legal pretext for broad tariffs rather than effectively combating forced labour.”
“These actions create more uncertainty at a time when the world trading system is under real pressure. It is more important than ever that like-minded countries work together to strengthen trade and investment including reducing barriers that make it easier for everybody to trade.”
In its public submission on the investigation, New Zealand said: “New Zealand acknowledges the importance of addressing forced labour as an issue that both distorts international trade and is the source of significant suffering and harm, and that the US is bringing extra attention to tackling this important issue.
“New Zealand takes the issue of forced labour in supply chains seriously. We are an active participant in multilateral, plurilateral, and bilateral initiatives that seek to address forced labour, including initiatives alongside the US. Any response imposing measures on New Zealand exports, given the very low risk of forced labour, would be highly disproportionate, unfair and unjustified.”
The Ministry of Foreign Affairs and Trade’s report on the matter forecast that the tariff would replace a 10% tariff levied under a different law, which was set to expire on Friday.
Trade expert Charles Finny said the investigation was clearly pre-determined, with the investigation list covering 60 countries which provide 99% of US imports.
“No one would be surprised by this,” Finny said.
“If you look at the Liberation Day tariffs we were paying 15%. Then that was deemed illegal by the Supreme Court. They imposed a 10% tariff under a different part of the Trade Act. And now they are using section 301,” Finny said.
“We’ve been operating for most of the Trump administration this time around with tariffs of between 10% and 15%. So 12.5% is a midpoint.”
While the tariffs were unwelcome exporters had found ways to cope.
“It’s not ideal but our export industry is very resilient. We are producing great product that the US market wants. It will remain a very important market.”
The US is New Zealand’s second-largest export market and largest wine market.