New Zealand’s Trade Minister, Todd McClay, is preparing to visit Washington in response to the U.S. government’s sudden decision to impose a 15% tariff on imports from New Zealand.
This announcement by President Donald Trump came as a surprise, especially after earlier indications suggested a 10% rate. The tariff took effect in early August 2025, impacting New Zealand exporters who rely heavily on the U.S., the country’s second-largest export market.
The new tariff is part of the U.S. administration’s strategy to target countries with which it runs a trade surplus, placing New Zealand alongside nations such as Japan and South Korea. McClay has criticised this approach, noting that New Zealand’s trade surplus—approximately $500 million—is modest compared to other countries and the overall scale of U.S. trade.
Annually, New Zealand exports nearly NZ$9 billion in goods to the U.S. The introduction of this tariff could add more than NZ$1.3 billion in costs, significantly affecting exporters. Key sectors impacted include beef, wine, dairy, honey, horticultural products, machinery, and pharmaceuticals. The increased costs are expected to have a wider effect on related industries and the New Zealand economy as a whole.
Minister McClay seeks urgent discussions with his U.S. counterpart to advocate for fairer trading terms. He highlighted the tariff disparity by stating, “The U.S. currently faces an average tariff of just 0.8% when exporting to New Zealand, far lower than what we face into their market.”
Prime Minister Christopher Luxon described the tariff move as “blunt and late,” especially given prior positive discussions between the two nations. While he reassured that New Zealand exporters are resilient and that global demand for Kiwi products remains robust, opposition voices criticised the tariff as a “slap in the face” for New Zealand’s trade sector.
Alongside his U.S. visit, McClay will stop in Saudi Arabia to advance relations with the Gulf Cooperation Council (GCC). After nearly two decades of negotiation, New Zealand recently finalised a free trade agreement with the six GCC countries—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.
This landmark deal will remove tariffs on 51% of New Zealand exports to the region immediately and expand duty-free access to 99% of shipments over ten years. The agreement is regarded as the highest-quality trade deal the GCC has signed, promising benefits particularly for New Zealand’s agricultural industry.
“Following the United States’ 1 August decision to apply a 15 percent, or more, tariff to every country with a trade surplus, this visit will be an opportunity to discuss the impact of that decision and better understand the factors that may influence future U.S. tariffs,” McClay added.
“It’s important that we raise these concerns constructively, while reaffirming our commitment to the strong, cooperative relationship we have with the United States.”