New Zealand is the United States’ second-largest export market. However, a new 10% tariff on imports into the US will soon increase the cost of Kiwi-made goods, raising their shelf prices and forcing American consumers to pay more for these products.
The worry is that higher prices could reduce demand, leading to a decline in export numbers resulting in lower returns for New Zealand companies and producers.
Stuff Explainer Editor Lloyd Burr described exporters as feeling confused, uncertain, deflated, and hesitant to speak publicly about their concerns.
Even the American Chamber of Commerce (AmCham) took a cautious approach to naming New Zealand companies potentially affected by the Trump tariffs. However, it sought feedback from its members and shared their responses anonymously.
An AmCham spokesperson noted that the primary sentiment among respondents was confusion, particularly over whether the new tariff would be added on top of existing ones.
“One sector was paying a 7.5% tariff, recently hit with a 20% and now a further 34% tariff, but certain products in their sector may be excluded. So they’re seeking clarification,” the AmCham spokesperson said.
Higher tariffs are likely to impact New Zealand exporters whose goods transit through countries like Vietnam or China before reaching the United States.
To Retreat or to Relocate?
One company informed AmCham that it needs to secure an additional $100,000 within the next few weeks to address expenses stemming from the recent tariff announcement. According to Stuff, the company is uncertain about how to obtain the necessary funds.
Meanwhile, “One exporter with 20% of their business in the US is withdrawing from there,” AmCham said.
There are also several Kiwi manufacturers currently exporting to the US who are planning to establish operations there and transition their production to the United States instead.
While this could mean job losses for New Zealand, a potential positive is the relatively low tariff imposed on New Zealand compared to competitor nations, which could provide a competitive edge.
Tariff Pause
President Donald Trump announced today a 90-day suspension of increased tariffs for most countries, marking a surprising shift in his trade war strategy that has impacted global markets.
In a post on X, Donald Trump explained that his decision was influenced by the fact that over 75 trading partners refrained from retaliating and reached out to the U.S. to engage in discussions about the issues he had raised.
However, the pause did not extend to China, which retaliated with an 84% tariff increase. In response, Trump escalated duties on Chinese imports to 125%, effective immediately.
“Based on the lack of respect that China has shown to the world’s markets, I am hereby raising the tariff charged to China by the United States of America to 125%, effective immediately,” Trump said.
“At some point, hopefully in the near future, China will realise that the days of ripping off the U.S.A. and other countries are no longer sustainable or acceptable.”
Update: The White House clarified that President Trump’s recent tariff increase on Chinese imports, raised the total levies for the year to an astonishing 145%, surpassing the previously reported figure of 125%. This adjustment reflects the inclusion of a prior 20% tariff imposed earlier in the year.