Prime Minister Christopher Luxon says “tariffs are not the way to go” and expects US consumers will face higher prices for New Zealand goods in his reaction to President Donald Trump’s global tariff application.

While he was not surprised by today’s announcement, Luxon said New Zealand didn’t support the idea of applying tariffs and was concerned about the “tit-for-tat” nature of Trump’s policy.

Many exporters still see long-term growth in the US, Luxon said, and he believed New Zealand was “well-positioned” to look at other opportunities globally, such as India.

Asked if this was the act of a friend, Luxon repeated it was not a surprise. He said New Zealand would not retaliate as he believed the country benefited from being a low-tariff country.

If we were to hike tariffs ourselves, that would lead to prices increasing here, he added.

He also made the point that the “sad reality” was that the cost of goods would increase for the US consumers due to the tariffs.

US President Donald Trump on Thursday morning NZT announced his administration would slap tariffs on goods being exported from countries around the globe. The tariffs being handed out by the US are being described as “reciprocal”. The US says they are at least half of the tariffs being applied by those countries on the US.

New Zealand has been given a 10% tariff; the minimum being applied on all countries. However, the US has also claimed New Zealand is currently charging it 20%.

It is unclear what makes up that 20%. Trade Minister Todd McClay this morning said he had asked New Zealand officials to clarify it with the US.

He said that most-favoured nation WTO average tariffs of the kind the US exporters would face entering New Zealand would be closer to 1.9%.

McClay said that despite the tariffs being applied, New Zealand was “no worse off than anybody else”.

“Although tariffs are not good for trade our exporters are telling me they still see opportunity in the US market.”

Labour’s trade spokesman and former Trade Minister Damien O’Connor said the way tariffs would impact the US market could have a bigger impact on New Zealand’s exporters than the 10% tariff they themselves will be paying.

With tariffs applying across the board to exports into the US, costs for goods in the US will rise, dampening demand for goods, O’Connor warned.

O’Connor said the Government “needs to go through carefully with the sectors and see what the implications may be”.

The New Zealand sharemarket fell sharply in the opening minutes of trade on the back of Trump’s tariff announcements.

By late morning the New Zealand dollar had dropped by about half a US cent to US56.90c on the news.