In a press statement issued this morning, Trade and Agriculture Minister Todd McClay acknowledged the financial impact of the U.S. decision but emphasised New Zealand’s commitment to calm, calculated engagement. “While this is a significant development, New Zealand remains competitive against other exporters in the U.S. market,” he said. “New Zealand’s interests are best served in a world where trade flows freely.”
McClay made it clear that retaliation was not on the table. “Tariffs have consequences for the global economy – impacting inflation, demand, currency stability, and economic growth,” he noted. “New Zealand has no plans to retaliate against the US tariffs because that would “put up prices on New Zealand consumers and be inflationary,” he told reporters this morning.
In his remarks to reporters, McClay also addressed confusion over Trump’s justification for including New Zealand in the tariff sweep. The U.S. administration cited a supposed 20% tariff that New Zealand allegedly levies on U.S. imports—an assertion McClay refuted outright. New Zealand does not have a 20% tariff rate that it subjects U.S. exports to, he clarified, adding that the actual rate is closer to 2%. “That figure, and how low it is, is a point that has been made to the U.S. in talks between the two countries,” he said.
New Zealand officials are now working behind the scenes to correct what McClay implied was a misunderstanding, possibly linked to outdated or misinterpreted World Trade Organization data. Discussions are ongoing with U.S. trade counterparts to clarify whether the 10% tariff is a flat blanket charge or additive to existing tariffs on certain goods.
The financial implications for New Zealand exporters are significant. With $9 billion in annual exports to the U.S., a flat 10% tariff could cost exporters close to $900 million. However, McClay suggested the burden may ultimately be borne not by New Zealand businesses but by American consumers. “I think there is some pretty clear evidence that will be worn by US consumers, not New Zealand exporters,” he said.
Foreign Minister Winston Peters also weighed in on the situation, taking to social media to emphasise that the government’s prior diplomatic engagement had helped mitigate the worst-case scenario. Peters, who recently met with U.S. Secretary of State Marco Rubio in Washington, posted that “New Zealand companies, who were fearing much worse, are well positioned compared to exporters from other countries.”
While the Trump administration’s move has unsettled global markets and sparked concerns about rising prices, the NZ government appears determined to take the high road. Tariffs are “not good for trade, so we’re not feeling relieved.” McClay said, “Although I think there is recognition that New Zealand isn’t seen as one of the countries that has an unbalanced trading relationship with the U.S.”
Instead of retaliating, New Zealand is doubling down on its longer-term trade diversification strategy. McClay highlighted ongoing efforts to reduce barriers and create new opportunities with key partners including the EU, UK, UAE, GCC and, most recently, India.
Despite the immediate economic jolt, the government’s tone remains pragmatic. “We will be talking with the Administration to get more information, and our exporters to better understand the impact this announcement will have,” McClay said in his statement. “We will continue to advocate for a rules-based trading system.”