Direct financial impact should be "manageable," economist says
New Zealand exporters are bracing for the impact of a new 10% tariff on merchandise exports announced by the United States government, effective April 5.
While the direct financial repercussions are estimated to be around $900 million annually — approximately 0.2% of New Zealand's gross domestic product (GDP) — Kelly Eckhold, chief economist at Westpac NZ, believes the situation is manageable.
"The potential maximum direct impact will be significant but likely manageable by NZ exporters. The impact will not be evenly spread across industries, however," Eckhold said.
"New’s Zealand’s largest exposure is in the meat industry (especially beef), with exports to the US totalling $NZ2.6bn in 2024, accounting for 30% of all meat exports. Another key exposure is the wine industry, with exports to the US accounting for 35% of total exports."
Eckhold also cautioned that the indirect effects could be more significant and challenging to quantify. The tariffs may weaken global demand, which could lead to a depreciation of the New Zealand dollar and affect trade balances.
With New Zealand's largest trading partners, including China, facing even steeper US tariffs, the economic fallout could extend beyond direct export revenues.
The Reserve Bank of New Zealand (RBNZ) identifies these developments as a major downside risk to the global outlook, which by extension could influence New Zealand's economic trajectory.
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