Fiji And Other Pacific Nations Decry 'Unfair And Disappointing' US Tariffs

Wednesday, 9 April 2025, 8:05 pm
Article: RNZ

Caleb Fotheringham, RNZ Pacific Journalist

Leaders in Pacific nations are disappointed and trying to wrap their heads around the United States' tariffs.

Fiji's Finance Minister said that its 32 percent tariff by the Trump Administration - the highest in the Pacific - is unfair, while the government spokesperson for Tokelau said he did not understand how the region threatens the American economy.

President Donald Trump's charts claim Fiji charges the US 63 percent tariffs - citing currency manipulation and trade barriers - but the Fijian government disputes the figures.

The US calculated "reciprocal tariffs" based on whether the US has a trade deficit with trading partners.

In Fiji's case, it exports more than it imports from the US, so it was given a high tariff.

According to OEC data, in 2023 Fiji exported US$366m to the United States, while importing US$158m from the superpower.

The nation's Finance Minister and Deputy Prime Minister Biman Prasad that said 72 percent of imported US goods had zero tax, while 25 percent were given a tax of less than five percent.

He said that it is far from the US-imposed 32 percent tariff on goods from Fiji.

"We feel that using trade deficit to calculate the reciprocal tariff rate is wrong, a trade deficit is not a tariff," Prasad said.

"It is on that basis that it is unfair and disappointing."

He said that Fiji was readying itself on 3 April, like all nations, for the tariff announcement, but did not know the details.

"It wasn't clear whether they were going to look at every country in every part of the world or the initial things coming out was about bigger countries, countries which had huge trade deficits."

The tariffs reached as far as Tokelau, a non-self-governing territory of New Zealand with a population of about 1500. It was given the baseline 10 percent tariff.

Tokelau's government spokesperson Aukusitino Vitale said it showed that the United States knew very little about his territory.

"I am finding it really difficult to understand what the threat to the US economy there is in the Pacific and I think we're kind of saddened."

Sione Taufa with the University of Auckland's business school said the tariffs are undermining a decade of goodwill in the region by the US.

"You look at it holistically with the tariffs, withdraw from the climate agreements in relation to the withdrawal of USAID, from their initiatives and that adds up."

He said Pacific nations would start looking away from the US for trading partners.

The Northern Mariana Islands (CNMI) is already in a bad economic position as its been unable to recover its tourism industry post Covid-19. It has resulted in the shut-down of several large businesses.

RNZ Pacific's CNMI correspondent Mark Rabago said the territory needed to "hunker down and just pray".

"It will be devastating of course for an economy as small as the CNMI because basically all goods coming from China or Europe or whatever will have an added tax to it so everything will be more expensive."

However, Rabago said there could be a bright side, with the possibility that tariffs could reignite the territories domestic manufacturing industry.

The CNMI used to have 34 garment factories, all located on Saipan, contributing some 60 million US dollars in direct taxes a year to the local government. The last factory closed in 2009.

"Manufacturing countries could actually set up shop in the CNMI and basically the CNMI could be an intermediary where they could make goods here, just like what happened in the garment industry."

Prasad said his government would make its decisions on what to do about the tariffs once the impact becomes clearer.

He said some goods could become cheaper, for example China would likely look for new markets to buy its goods.

"There is a lot of uncertainty and the expectation of what might happen or what other countries do in the short to medium term will have to be factored in, to policies and the decisions, that we make here in the Pacific and in Fiji with how we respond to this."

He said Fiji's trade ministry is talking with its US counterparts and other trade partners about next steps.

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