Trump tariffs manageable for NZ

The recent announcements are expected to have manageable impact on New Zealand exporters. In 2024, total goods exports amounted to approximately NZD 9 billion.

10% additional tariff rate = export revenue losses of around NZD 900 million.

What industries suffer most:Beef = NZD 2.6 billion in exports to the US in 2024, constituting 30% of all meat exports. Wine = US exports making up 35% of total wine exports.

The NZD/USD exchange rate is expected to depreciate, which could help offset some of the impact on New Zealand—a weaker exchange rate makes exports cheaper. It is estimated that about half of the additional cost might be absorbed by the weaker exchange rate.

New Zealand exporters may be able to redirect some goods from the US to other markets that now offer better relative returns, though likely lower than those previously available in the US. This opportunity could grow if other countries reduce US imports in retaliation and seek alternative suppliers. Many of New Zealand’s key trading partners are facing much higher US tariffs than New Zealand.

Chinese import tariff to the US = 54% (including a new 34% increase). Vietnam import tariff to the US = 46%

Many affected economies are likely to respond to the tariffs with looser fiscal or monetary policy.

Fiscal Policy = lower taxes and increased government spending to support companies Monetary Policy = lowering interest rates to boost spending and GDP growth

The risk is short-term short-term inflationary pressures from higher domestic prices caused by their own tariffs. However the OCR cut is likely to be a 25 basis point drop.

Source: Westpac – Economic Bulletin – 3rd April 2025

For more on tariffs and trade view the key notes (accompanied by fully coloured diagrams/models) on elearneconomics that will assist students to understand concepts and terms for external examinations, assignments or topic tests.