The risk nobody priced in
New Zealand exporters have spent the past year learning to live with tariffs. They’ve modelled the percentages, adjusted their pricing, and in some cases abandoned the US market entirely. But tariffs are at least predictable. What happened to a Kiwi family health company is something else: US border agents destroyed a shipment, and the business is now reportedly fighting for survival.
The details matter less than the pattern. US Customs and Border Protection has broad authority to seize and destroy goods it deems non-compliant, whether on biosecurity, labelling, forced labour, or a dozen other grounds. The burden of proof falls on the exporter. Legal recourse is expensive, slow, and designed for companies with deep pockets. For a small operator shipping a single consignment, the loss of product and working capital in one stroke can be terminal.
This is not an abstract risk. It is happening inside New Zealand’s second largest export market, now worth NZ$14.6 billion a year.
Tariffs were just the opening act
The Trump administration’s 10% tariff on NZ goods, escalating to 15% by August, has already reshaped export economics. Fifth-generation Hawke’s Bay apple grower Paul Paynter of Yummy Fruit told RNZ that fruit shipped to the US this year “returned probably a dollar less than the costs” and that the company has no plans to ship again until tariffs are gone. Apple exports to the US were worth NZ$70 million in 2023. That revenue has effectively evaporated.
Zuru, the NZ-founded toy and consumer goods giant, faces tariff exposure on a different scale. Co-founder Nick Mowbray told RNZ the tariffs would cost the company around $3 billion on $2 billion of US-bound shipments. He described the administration as “definitely very chaotic” and called forward planning “obviously impossible”. Zuru has since sued the US Government in the Court of International Trade, claiming hundreds of millions in refunds.
But Zuru can afford lawyers. Most Kiwi exporters cannot.
Enforcement is the hidden layer
Beyond tariffs sits a compliance regime that is expanding fast. EY has warned that US forced labour investigations now create an additional risk layer for NZ exporters, with border agents empowered to assess whether supply chains touch scrutinised regions or suppliers. This is a compliance dimension most small exporters have no framework to manage.
Joseph Harawira from Wai Manuka told the EMA that entering the US market properly requires $5-7 million over four years and that “whatever you’re thinking, it’s going to cost more and take longer”. Border unpredictability makes that capital commitment harder to justify and harder to raise.
EMA’s Simon Devoy puts it bluntly: “uncertainty is the new normal”. The US Supreme Court ruled in late February that Trump exceeded his emergency powers authority on tariffs, but the administration simply reinstituted equivalent tariffs under different legislation. Court victories don’t translate into stability.
The gap that should worry every exporter
MFAT’s September 2024 trade report flagged increased trade protectionism as a key forward risk, noting NZ export growth had slowed from 12.2% to 2.8%. The NZIBF/Westpac analysis found aggregate impacts on primary exporters are currently manageable, cushioned by strong commodity prices. But that buffer is thinner than the headline numbers suggest.
NZUS Council Executive Director Fiona Cooper acknowledged the uncertainty is “terrible” while noting NZ companies have “risen to the challenge.” Rising to the challenge is one thing when you’re a billion-dollar toy company with international legal counsel. It is something else entirely when you’re a family health business watching your shipment get destroyed at the border with no insurance product that covers the loss and no practical legal avenue to pursue.
The uncomfortable truth is this: NZ’s NZ$25.8 billion trade relationship with the United States now carries a category of risk that sits below the tariff line and beyond the reach of trade negotiations. Geopolitical risk has reached all the way down to individual pallets on a loading dock. Any exporter who hasn’t stress-tested what a single destroyed shipment would do to their cash flow is running a bet they may not be able to afford.
Sources
- MFAT: NZ exports to the US – strong growth continues (June 2024) (2024-06-01)
- RNZ: Major New Zealand apple grower shuts off shipments to US as tariffs bite into profits (2025-06-01)
- RNZ: Nick Mowbray says Trump’s tariffs would cost Zuru toys $3 billion (2025-04-01)
- NZ Herald: Trump tariffs – Zuru Toys co-founder Nick Mowbray says planning through chaos impossible (2025-04-01)
- NZ Herald: Zuru sues US Government over unlawful Trump tariffs, seeks huge refund (2025-03-01)
- BusinessDesk: US forced labour probe raises tariff risk for Kiwi exporters, EY warns (2025-05-01)
- EMA: US tariffs prompt Kiwi exporters to rethink market strategies (2025-05-01)
- NZ Manufacturer: Uncertainty and opportunity for Kiwi exporters (2026-03-01)
- MFAT: A turning point in New Zealand’s trade performance? September quarter 2024 (2024-12-01)
- NZIBF: Impact of US tariffs on NZ’s major exports (2025-12-01)
- NZUS Council: Zuru legal action highlights ongoing tariff uncertainty (2025-03-01)