'Crisis almost business as usual' as US tariff hits Kiwi exporters

The US is Aotearoa's biggest wine market.

New Zealand exporters are already eyeing up alternative markets as a new iteration of US President Donald Trump's trade tariffs comes into force.

The new, 12.5% import tax on most Kiwi exports – excluding beef and kiwifruit – came into force on Friday.

"I think crisis has almost become business as usual," EMA Head of Advocacy and Strategy Alan McDonald told 1News.

"People aren't waiting for things to change or turn."

That tariff has been hiked from 10%, and has been levied against 60 countries around the world the US claims have failed to properly stop the import of goods made using forced labour.

Trade Minister Todd McClay labelled that argument "absolute rubbish", while NZ International Business Forum executive director Felicity Roxburgh said the US administration had been determined to use tariffs for economic or political leverage.

Business leaders say confidence is 'brittle' as the higher 12.5% import tax lands on an already tough market.

Wine industry braces for 'quite an impact'

The new tariff will have "quite an impact" on New Zealand's wine industry, according to Loveblock wine founder Erica Crawford.

"You don't know what's going to happen tomorrow, let alone next week or next month."

The US is New Zealand's biggest wine market. According to New Zealand Winegrowers, Kiwi wine exporters sold more than $720 million worth of product to the US in the year to June.

That's well above the UK, which has the number two spot: it imported $437 million worth of wine over the same period. But unlike exports to the UK, which grew by 4%, wine exports to the US shrunk by 5%.

"Last year was really, I have to be honest, brutal," Crawford said.

She said the tariffs were landing on top of an already tough market, with American shoppers cutting back and freight costs climbing.

"People in the US are watching at pennies like we do. This coinciding with Iran war, of course. So it's a double whammy because suddenly the freight rates are going up."

McDonald agreed, saying confidence remained "brittle" and that many exporters were now actively looking elsewhere for opportunities.

Kiwi wine distributors are looking to boost their exports to India.

Exporters eye India as tariffs bite

Both McDonald and Crawford pointed to India as one of the markets picking up interest.

"India, for example, they are creating opportunities that are being taken advantage of," McDonald said.

Crawford said she was exploring other markets as a way to "spread our risk a little", with India high on the list.

"We're really looking at India at the moment. The Free Trade Agreement will help."

At the moment, New Zealand exports just $438,000 worth of wine to India – but that's up 49% on the year before. "If I could have 0.000001% of that market, I would be super happy," Crawford said.

The interest comes as the New Zealand-India Free Trade Agreement, signed earlier this year, works its way toward entering into force. The Government has said the deal will eventually reduce or eliminate tariffs on 95% of New Zealand exports to India, with more than half becoming tariff-free immediately once it takes effect.

Prime Minister Christopher Luxon and Indian Prime Minister Narendra Modi elevated the relationship further during Modi's visit to Auckland this month, agreeing to a Roadmap to 2030 that includes a goal of doubling two-way trade to $7 billion.

Trade Minister Todd McClay has also pointed to early signs of a "halo effect" from the deal, even before it takes force – citing a 63% jump in apple export volumes to India since negotiations began, with the country climbing from New Zealand's seventh-largest apple market to its fourth.