EXECUTIVE ORDER – REGULATING IMPORTS – RECIPROCAL TARIFF (4.01 p.m.)

Mr Deputy Speaker, Sir, with your permission, I am making a Statement on the Executive Order entitled “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that contribute to Large and Persistent Annual United States Goods Trade Deficits” signed by President Trump on 02 April of this year. President Trump invoked his authority under the International Emergency Economic Powers Act of 1977 to address the national emergency posed by the absence of reciprocity in the US trade relationships and other harmful policies like currency manipulation and unfair trade practices. The Executive Order imposes a baseline 10% tariff on all imported goods as from 05 April 2025. The United States will also impose an individualised reciprocal higher tariff proportionate to the level of its trade deficit with that country as from 09 April 2025. The Executive Order further states that these tariffs will remain in effect until such time as the President determines that the threat posed by the trade deficit and underlying non- reciprocal treatment is satisfied, resolved or mitigated. Some products that are exempted from this policy are steel and aluminium, copper, pharmaceuticals, semiconductors, critical minerals and energy products. Basically, all these goods are strategic for the United States, which explains their exclusion. It is our understanding, Mr Deputy Speaker, Sir, that the calculation of the reciprocal tariff is based on the trade deficit incurred by the United States with Mauritius in 2024. In that year, Mauritius exported around USD 234.5 million of goods to the United States while it imported only USD 48 million of goods. This results in a trade deficit of USD 186.5 million for the United States. The trade deficit as a percentage of Mauritius exports to the US is estimated at 80%. Therefore, as per the US calculation, the reciprocal tariff for Mauritius is 80%. However, this percentage was halved and a discounted reciprocal tariff of 40% will be applied for our exports entering the United States market. The main products exported to the US include live primates, fish, sugar, textiles and apparel. As soon as President Trump assumed Office on 20 January 2025, he signed the America First Trade Policy Presidential Memorandum which aims at undertaking a number of studies and proposing recommendations to address persistent trade deficits, amongst others. In February 2025, the Office of the United States Trade Representative (USTR) had requested public comments on unfair trade practices and non- reciprocal trade arrangements affecting the US economy by the deadline of 11 March 2025. Accordingly, Mauritius made a submission highlighting that the top 20 US exports to Mauritius do not attract any tariff at all. The mutual benefits of AGOA were also underscored. On 03 April 2025, the WTO Director-General stated that many members had contacted the WTO regarding the potential impact of the tariffs on their economies and global trade. She expressed concern over the decline in trade and the risk of a tariff war driven by retaliatory measures. Highlighting the potential for significant trade diversion, she urged members to handle the resulting pressures responsibly to prevent escalating tensions. The Executive Order means, Mr Deputy Speaker, Sir, that our exports of goods to the United States will now be subject to a tariff of 40%. This will be clearly highly detrimental to our economy. The US is the 4th largest buyer of Mauritian goods. Some 41 export-oriented enterprises, employing some 16,750 persons, depend on the US market. Being an AGOA eligible country, Mauritius has been benefiting from duty-free market access for some 6,400 product lines on the US market. Other AGOA eligible countries like Lesotho, Botswana and Madagascar will also face a tariff varying between 50%, 37% and 47%, respectively. The Ministry of Foreign Affairs had a meeting, which included high-level representatives from various Ministries, as well as public and private sector stakeholders, namely the MCCI, the Sugar Syndicate, Business Mauritius and MEXA, with a view to charting the way forward and mitigating the fallouts on our economy. I have chaired two meetings with the Ministry of Foreign Affairs, Regional Integration and International Trade, and the officers of the Ministry of Finance, with the Junior Minister. The following course of action was agreed – 1) Discuss possible avenues with the United States at the bilateral and regional levels; 2) Work with like-minded group of countries, including AGOA eligible countries as well as the African Union mission in Washington D.C. with a view to devising a strategy to open up discussions with the United States; and 3) Negotiate a Bilateral Trade Agreement with the United States which would provide the necessary predictability to our trading relations. A High-Level Committee has been set up by Government to monitor the situation and liaise with all public, private and foreign stakeholders, including the Corporate Council for Africa, that can work together to mitigate the fallouts from the US Executive Order and ensure continued trade between Mauritius and the United States. Government will also engage with the US as the Executive Order provides that reciprocal tariff can be modified if the country takes – “significant steps to remedy non-reciprocal trade arrangements and align sufficiently with the United States on economic and national security matters.” I am also writing to President Trump with a view to discuss the concerns of Mauritius. Thank you.

Hon. Minister of Social Integration, Social Security and National Solidarity, you have a statement?

Yes, Mr Deputy Speaker, Sir. (4.08 p.m.) NPF/NSF INVESTMENT COMMITTEE – HOLD ATTITUDE LTD –SECURED BOND INVESTMENT The Minister of Social Integration, Social Security and National Solidarity (Mr A. Subron): With your permission, I wish to make a Statement on the secured bond investment made by the National Pensions Fund (NPF) and the National Savings Fund (NSF) in Hold Attitude Ltd, a private company registered in Mauritius. This bond investment was made for a total amount of Rs1.45 billion, on 01 March 2022 and was due to be repaid by 30 September 2024. I wish to inform the House that the bond investment has now been fully repaid to the tune of Rs1,618,214,214, the last payment being made on 27 March 2025. This amount comprises the following – • Capital Amount Due Rs1,450,000,000 • Interest Due Rs142,048,357 • Interest Penalty (of 3% above applicable interest rate) Rs26,165,857 Mr Deputy Speaker, Sir, the House may wish to refer to my reply made to PQ B/23 of 10 December 2024, whereby I informed the House that the NPF/NSF Investment Committee had agreed to the extension of capital repayment of the bond issued by Hold Attitude Ltd for an amount of Rs1.45 billion, from 30 September 2024 to 31 March 2025, but interest due was to be paid by the end of December 2024. Given that as at 31 December 2024, the interest due was not settled, the NPF/NSF Investment Committee, on 28 January 2025, took the decision to trigger the event of default in accordance with Clause 9.1 of the Share Pledge Agreement and in conformity with the Second Schedule of the Notes of Subscription Agreement, with the aim that by the end of March 2025, the process of triggering the default will be completed. The NPF and NSF had embarked in this process by requesting a noteholders meeting, which was held on 06 March 2025, and thereafter Hold Attitude Ltd was requested to repay the capital, interest and penalty on the interest for a total of Rs1,613,307,877 by 19 March 2025. It is to be noted that Hold Attitude Ltd had pledged 40 % of shares it held in the Attitude Hospitality Ltd as collateral as part of the bond issue. On 13 March 2025, a proposal was made by the Societé Antisthene, the major shareholder of Attitude Hospitality Ltd, to buy the 40% of Hold Attitude stake in Attitude Hospitality Ltd, through a Share Purchase agreement and NPF and NSF would then be fully paid by the Société Antisthene, at latest by 31 March 2025 Consequently, upon advice from the Attorney General’s Office, on 19 March 2025, the NPF/NSF Investment Committee agreed to the proposal made by Société Antisthene to buy the shares of Hold Attitude through a Share Purchase Agreement (SPA), following which, the NPF and NSF would receive all their dues that is capital, interest, plus penalty on the interest due for a total amount of Rs1,618,214,214 by 31 March 2025. Mr Deputy Speaker, Sir, it is to be pointed out that the proposal made by Société Antisthene to buy the shares of Hold Attitude was in accordance with the Constitution of Attitude Hospitality Ltd which provides for the shares to be offered for sale to the existing shareholders of Attitude Hospitality Ltd and only if they would refuse, then the shares would be sold to a third party. Mr Deputy Speaker, Sir, I wish to reiterate the commitment of this Government to ensure that it is the interest of the people, first and foremost, that guides the actions of Government. In this particular matter, it is the safeguard of the contributions of workers of our Republic, under both the National Pensions Fund and the National Savings Fund, that has guided the actions taken by my Ministry. Mr Deputy Speaker, Sir, my Ministry has acted in a fair, transparent and decisive manner to bring forward a rapid resolution to the recovery of funds invested by the National Pensions Fund and the National Savings Fund in the bond issued by the Hold Attitude Ltd. Thank you, Mr Deputy Speaker, Sir.