I see reports on New Zealand being listed as charging the US a 20% tariff on its goods. In fact, NZ charges about 1.9% on average, plus 15% GST. The total of the two is 16.9%, the tariff being paid by the end-user, while the GST is refunded to the importer when they file their periodic GST return.
However, this is NOT the methodology America appears to have used. How did NZ get listed at 20%? The US appears to have looked at the trade balance, currently NZ exports to the US, about $1.1 billion more than it imports from the US ($4.5 billion). Thus, the $1.1 billion surplus represents 19.65% of NZ's exports ($5.6 billion). They've rounded that 19.65% up to 20%.
Any country whose surplus increases from hereon will likely face increases in tariffs if that surplus becomes a greater percentage of its exports to the US. The US is effectively saying, you need to buy more from us, if you want to sell more to us. You cannot buy nothing and expect to sell more. Do you see?
I'm sure NZ officials do not understand this methodology, so if you're reading this, please contact the NZ government and inform them.
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