- US President Donald Trump has imposed 10% tariffs on New Zealand goods.
- Trump announced reciprocal tariffs of half, saying “they do it to us, we do it to them.”
- America will impose a 25% tariff on all foreign-made cars.
- US stocks fell 2% in after hours trading following Trump’s tariff announcement.
President Donald Trump on Wednesday announced huge new tariffs of 34% on imports from China and 20% on imports from the European Union - two of the main US trade partners.
Trump said that a baseline tariff of 10% would be imposed on imports from a wide range of other countries, but that some would come under far harsher duties, also including 24% on Japan and 26% on India.
That baseline of 10% includes New Zealand which former diplomat Stephen Jacobi described as “unjustified, painful but at a lower level of pain than expected”.
ARTICLE CONTINUES AFTER LIVEBLOG
ARTICLE CONTINUES
Kiwibank economists earlier this week said the global outlook is shrouded in uncertainty.
“That’s not great for the Kiwi ‘small, open’ economy.
“While we’ve managed to stay off the Trump tariff country hit list (for now), the ramifications of an escalated trade war could hurt us significantly.”
The scope of Trump’s proposed tariffs is raising fears of a global growth slowdown, Kiwibank said.
“And in that environment, demand for Kiwi exports will come under pressure.
“It certainly doesn’t help that our two key trading partners are at the forefront of the trade war. Such a scenario could stall the Kiwi economy’s expected recovery.”
Westpac economists said it’s likely Trump’s announcement won’t directly impact New Zealand outside of any general tariff applied to all countries.
“However, we doubt this will be the end of the story as the administration is likely working on sector-specific tariffs that could include the agricultural products NZ exports to the US.”
Speaking to The Country radio show last month, Trade and Agriculture Minister Todd McClay said Trump’s comments about agriculture were “worrying for New Zealand”.
Trump posted on his social media platform Truth Social: “To the Great Farmers of the United States: Get ready to start making a lot of agricultural product to be sold INSIDE of the United States. Tariffs will go on external product on April 2nd. Have fun!”
McClay said: “It’s a very big beef market for us, high quality beef going up there, but actually a lot of our beef fat and tallow, they mix it with their beef and it goes into hamburger chains.
“The announcement around agricultural trade is extremely concerning.”
The US was the second-largest export destination for New Zealand goods in 2024, with a value of $9 billion, or 12% of our total exports by value, according to Stats NZ.
Meat exports led the way with $2.6b worth of trade, followed by dairy exports at $883 million.
The Meat Industry Association (MIA) and Dairy Companies Association of New Zealand (DCANZ) wouldn’t comment on the matter amid significant uncertainty.
McClay said while there was no indication Trump was focused on New Zealand, “there is harm done to us”.
“Fisher and Paykel, as an example, have a manufacturing plant in Mexico selling into the US. They’re hit by the 25% tariffs,” he said.
“But ultimately, what happens is you put all of these tariffs on, we are not less competitive in that market because it’s on everybody, but it is harder to sell our product there.”
McClay said New Zealand was trade diverse with a wide network of Free Trade Agreements (FTA).
“The European Union FTA is not even into force a year, yet we’ve seen almost a 30% increase in exports from New Zealand to the EU.
“We will still do well, however, restrictions of trade and tariffs on New Zealand products going into the US is concerning and it will harm us.”
The tariff picture so far
Since taking office for a second term, Trump has escalated his protectionist trade policies.
In March, Trump imposed 25% tariffs on all steel and aluminium products.
China – a key target during Trump’s first term – was also hit with 20% tariffs on all Chinese goods.
Trump is currently waging an on-again, off-again 25% tariffs war with Mexico and Canada.
And more recently, Trump announced plans for 25% tariffs on automobiles and auto parts and has suspended a 10% tariff on Canadian oil and gas until April 2 (US time).
Trump has also threatened “reciprocal” levies on any country that imposes tariffs on the US.
Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sports. He reports on topics such as retail, small business, the workplace and macroeconomics.
Take your Radio, Podcasts and Music with you
