Exporters did what Washington asked and got a 15% tariff for it

Christopher Luxon lands in Shenzhen for this week’s Apec summit with a simple problem to manage. The 21 Apec economies account for more than 75% of New Zealand’s exports, and the two biggest of them are pulling in opposite directions. In its 2025 figures, Apec put the bloc at 61% of world GDP and 47% of world trade. That is not a forum. That is where New Zealand’s export risk now lives.

The uncomfortable part is that New Zealand exporters did the sensible thing, and it has not protected them.

Diversification was meant to be the safe play

For years the advice to Kiwi boardrooms was to reduce China dependence. They listened. Stats NZ reported in January 2025 that the US had overtaken Australia as New Zealand’s second-largest export destination in 2024, worth $9.0 billion, or 12% of total exports. A decade earlier the figure was $4.7 billion.

Meat told the story most sharply. In 2024 the US became New Zealand’s top meat market at $2.6 billion, up 17%, while China fell 32% to $2.1 billion, according to the same Stats NZ release. Beef and sheep meat processors rebuilt their order books around American buyers.

Then Washington sent the bill

In late 2024 Trump was still only threatening, pledging 10-20% tariffs on most imports and 60% on China. Then-trade minister Todd McClay warned at the time that blanket tariffs “would be bad news for the whole world”.

By August 2025 the threat was real, with the US imposing a 15% tariff on New Zealand exports. Luxon said in October 2025 that “we don’t think tariffs is the way forward. We are free traders,” warning of second and third order consequences.

The Washington think tank CSIS put its finger on the irony in October 2025. Countries that followed the “China plus one” strategy most diligently were facing the steepest tariffs under Trump’s second term, “effectively punishing the diversification Washington demanded”. New Zealand fits that description almost perfectly.

China quietly got bigger anyway

Meanwhile, the market exporters were told to hedge against kept growing. In the year to June 2026, goods exports to China reached NZ$20 billion, with two-way trade around NZ$43 billion. Dairy exports to China jumped 20% to NZ$10 billion, and New Zealand now supplies 49% of China’s dairy imports by value.

That is both a triumph and a concentration risk. Food and beverage made up three-quarters of goods sold to China. If Beijing decides to use market access as leverage, as it has with Australia before, the exposure sits squarely on dairy co-ops, meat processors and infant formula makers.

So the hedge has inverted. The diversification market now carries a tariff. The concentration market is growing faster than ever. Exporters who spread their bets have ended up with risk on both sides of the ledger.

Small players need the state in the room

This is why the summit matters more than the photo opportunities suggest. Trump is arriving with a delegation that includes Elon Musk and Mastercard chief executive Michael Miebach, with Google and Boeing also represented. Those companies can lobby the White House directly. New Zealand’s most competitive sectors, agritech, aviation services, renewable energy and specialist services, cannot.

For them, government-led trade diplomacy is the lobbying operation. As Fran O’Sullivan puts it, New Zealand “cannot afford to be squeezed” by the rivalry between the two powers.

The practical lesson for business owners is that geographic diversification alone is no longer a risk strategy. Exposure to both US and Chinese customers or supply chains now needs to be priced as political risk, with contingency plans for tariff shifts and sudden access restrictions in either direction.

What Shenzhen can realistically deliver

Nobody should expect Luxon to talk Trump out of the 15% tariff over a summit dinner. The realistic wins are smaller and still valuable. Keeping Beijing’s door open for dairy and meat, maintaining New Zealand’s reputation as a reliable rules-based trader, and pushing the other Apec members to keep their own markets open while Washington closes its own.

The free trade case has not weakened. It has simply become harder to win. For a country selling more than three-quarters of its exports into one forum, showing up and making it loudly is the minimum. The next test is whether that diplomacy produces anything exporters can bank before the next tariff announcement lands.

Sources

• NZ Herald: Christopher Luxon at Apec: Why New Zealand must navigate US-China trade rivalry – Fran O’Sullivan (2026-11-13)
• APEC: APEC in Charts 2025 (2025-10)
• Stats NZ: US now New Zealand’s second largest export partner (2025-01-30)
• NZ Herald: Christopher Luxon faces Apec challenges as Donald Trump disrupts global trade (2024-11-15)
• RNZ: APEC Summit: NZ puts best foot forward ahead of Trump taking office (2024-11-15)
• RNZ: Luxon shores up Indo-Pacific trade as volatile Trump impact continues (2025-10-26)
• CSIS: Aligning APEC Beyond Trade Turmoil (2025-10-24)
• Asia Media Centre: APEC Leaders Week in Shenzhen – New Zealand’s stake: the dairy dependency (2026)