Finance Minister Nicola Wills will brief the country on the state of the economy this morning, following a global stock market rout triggered by US President Donald Trump’s tariffs. Last night she told Newstalk ZB the tariffs would have “profound implications for New Zealand”. 

The briefing will be livestreamed at the top of this story. 

Luxon said there are no plans to change the Budget at this stage. A social media post suggested the Government’s response will be, in the first instance, to advocate for the rules-based order on the world stage. 

Prime Minister Christopher Luxon, speaking on his way into National’s weekly caucus meeting, said this past week had seen “a profound shift in the global economic landscape and the way that countries respond to these events has the potential to have significant impacts on New Zealand”. 

The impact of the slump, which the Wall Street Journal called a “US stock meltown” is being felt in New Zealand, with KiwiSaver balances tanking and local stocks falling too. Two billion dollars was wiped off the value of New Zealand’s share market between last week and the end of Monday as the rout of global financial markets caused by the US tariff policy finally caught up with the local market. 

The NZX 50 benchmark fell 3.68% to 11,775.88 points on Monday, taking year-to-date losses to 9.89%. 

Luxon said that while New Zealand had got off relatively lightly from the tariffs, receiving just 10%, the lowest rate applied to most countries (with some exceptions), overall the tariff war would harm global growth prospects which would be bad for New Zealand. 

Prime Minister Christopher Luxon speaking to media about the Government's tariff response. Photo / Mark Mitchell 

“Yes, we’re not as badly affected as many other countries that face up to 50% extra tariffs on exports into the United States, but what actually is concerning me is the shift away from agreed rules and the risks of actually backsliding into a global trade war. 

“A trade war is frankly in nobody’s interests. It will slow global growth, it will hurt jobs, and it will reduce the amount of money we have in our wallets,” Luxon said. 

Luxon said New Zealand has a “strong history of advocating for an open, rules-based trading system. I will work with like-minded countries to promote free trade as a path to prosperity for New Zealanders and for those that we trade with.” 

No recession forecast, no change to Budget -yet 

Willis spoke to Ryan Bridge on Heather du Plessis-Allan Drive on Monday night, saying she had been receiving briefings from officials on the impact of the tariffs. 

“I have been getting ongoing updates from officials - situation updates from officials because obviously this is a significant global economic event. It has uncertain implications but undoubtedly profound implications for New Zealand.” 

These implications are probably bad news for the Budget. Low global growth forecasts will very likely hurt New Zealand’s growth outlook. This will reduce tax revenue, putting pressure on the Government come Budget time. 

“We will finalise our economic forecasts which then feed into the Budget in the next few days - I expect to be briefed on them soon,” Willis said. 

“The estimate that global growth is going to be lower than had been predicted - that has a run-on effect for New Zealand’s growth projections and so you will expect that to be reflected in our Budget updates,” Willis said. 

“I intend to keep New Zealanders updated on the significant material developments for the economy,” she said. 

Willis said officials were telling her that it is “likely that the tariffs are going to reduce overall estimates of global growth and that will therefore reduce our forecast growth in the economy, which as you can work out means potentially less revenue for New Zealand which is a significant economic effect that we need to be prepared for”. 

She said it was important to back exporters. 

Willis said she had not seen advice suggesting the slump would tip New Zealand back into recession. 

Labour leader Chris Hipkins said stimulus may be justified 

Labour leader Chris Hipkins said there may need to be more spending in the Budget to stimulate the economy. 

“I think there’d certainly be a justified case for that,” Hipkins said. 

“I think it will very much depend on where you did that extra spending, so if it’s investment spending, rather than short term spending, there is absolutely a case for that at the moment, because investment spending is something that we have underdone as a country for the last three or four decades and as a result, we’ve got a lot of catch up to do,” he said. 

Hipkins noted that Willis had criticised Labour for breaking pre-election spending promises during the last Government. Labour at the time blamed those broken promises on the changing economic climate. 

He said the pre-election spending promise of Willis was “a stupid promise for her to make”. 

He said Labour would “highlight the hypocrisy”. 

Thomas Coughlan is deputy political editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.