Tariffs, trade, and economic shifts
Donald Trump’s victory in the US presidential election could signal major shifts for New Zealand's economy, with experts voicing concerns about his proposed tariffs.
Trump’s protectionist policies include potential tariffs of up to 20% on imports, affecting key New Zealand exports such as beef.
Stephen Jacobi, executive director of the New Zealand International Business Forum, warned, “If it applied to New Zealand exports, it would be quite serious... it would kill off quite a lot of trade,” RNZ reported.
Trade tensions and risks for NZ exports
Former government trade negotiator Charles Finny described the outlook as “grim,” expressing doubt that New Zealand would be exempt from the tariffs, given that previous US tariffs on steel and aluminum were maintained even under Biden.
Finny said, “There is a strong possibility that we’ll have either a 10% or a 20% tariff imposed upon us,” which would harm New Zealand’s trade standing, particularly if key partners like Australia are exempted, giving them a competitive edge in the US market.
Potential for increased Trade with China
If Trump moves forward with substantial tariffs on China, Finny noted that it could prompt China to turn more toward New Zealand for imports, particularly in agriculture, RNZ reported.
“If [Trump] goes ahead and imposes 60% tariffs on China, China will retaliate… and that might create opportunities for us in China,” he said.
New Zealand’s growing free trade networks could mitigate some risks, though those exporting to the US would face tighter margins.
Back to 1930s protectionism?
Finny likened Trump’s trade stance to the 1930s protectionist era, with warnings of potentially severe consequences for global trade systems.
“This is very negative for the rules-based international order, and small countries such as New Zealand really bank those rules working and being respected,” he said, highlighting the risks for smaller economies dependent on stable international trade policies.
NZ economists brace for economic uncertainty
Economist Cameron Bagrie expressed immediate concerns over Trump’s protectionist promises.
“New Zealand is a small, open trading economy, and we would like to see freer trade as opposed to moving down the protectionist route,” Bagrie said, emphasising the challenges New Zealand could face if these policies come to fruition.
With domestic unemployment on the rise, New Zealand will need to navigate the potential economic disruptions carefully in the months ahead, RNZ reported.
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