NZ goods face surprise 15% US tariff rate, but reciprocal action remains unlikely
Friday, 1 August 2025
New Zealand will “seek changes” to the newly-announced 15% tariff on goods imported by US companies, while reciprocal tariffs on US goods remain unlikely.
US President Donald Trump on Friday signed an executive order for new tariff rates on a wide swathe of US trading partners that had not yet reached a trade deal with his administration. The new rates are due to go into effect in seven days.
The new tariff rate for New Zealand - 15% - is an increase from the “baseline” 10% that Trump announced during his “Liberation Day” event on April 2.
The Friday announcement came after a flurry of tariff-related activity in the last week, as the White House announced agreements with various nations and blocs ahead of the Trump’s self-imposed August 1 deadline.
Trump’s tariffs were originally scheduled for April 9, but were then postponed, first to July 9, then August 1, and now August 7 (US dates). White House representatives — and Trump himself — are now insisting no more delays are possible.
Trade Minister Todd McClay told RNZ on Friday that New Zealand was in a “very long list” of countries that would be paying a 15% tariff.
It appeared the decision was based on countries that had a trade surplus with the US, McClay said, but in New Zealand’s case the surplus was about half a billion US dollars, which was not “significant or meaningful” compared to the size of the US economy.
“So we will be making the case about why this shouldn’t have happened, and engaging very, very quickly again with US officials to clarify this and to seek changes around the new tariffs put on New Zealand exporters.”
Many New Zealand exporters to the US had been saying they had been able to absorb a 10% tariff, and in many cases pass it on, but at 15% “it is going to start having a greater effect upon our exporters,” McClay said.
US exports into New Zealand faced on average about a 0.8% tariff rate, he said.
Finance Minister Nicola Willis told reporters at a Friday afternoon press conference that the announcement from the US was “disappointing”.
“We will be talking to our friends in the United States about that,” she said, referring to the higher 15% tariff rate.
Willis brushed away the suggestion of implementing reciprocal tariffs on US goods, saying it was not clear such an action would be beneficial for New Zealand. That was an argument Christopher Luxon made in April when Trump’s tariffs were first announced.
Labour’s trade spokesperson Damien O’Connor said the new tariff rate was a “slap in the face” for exporters and could lead to higher costs at home.
“This is a major fail for the Government and for our relationship with the US,” O’Connor said. “Christopher Luxon has failed to secure a low tariff rate for our exports, while others around the world such as the EU and UK have managed to make deals. Unbelievably, the tariff has actually gone up from 10% to 15% on his watch.”
O’Connor said the cost of living was already increasing under the coalition Government’s watch, and it was only “getting worse”.
“Businesses will have to decide whether to pass the costs on to American customers, or weather those themselves. They may have to explore new markets. None of these options are good for business confidence here at home,” he said.
While New Zealand faced a 15% tariff, it was by no means the worst hit, with Syria slapped with a 41% tariff, Laos and Myanmar on 40% and Switzerland on 39%. Vietnam is looking at 20% and Vanuatu has been slugged with 15%.
Australia, though, has dodged a tariff hike, with their goods subject to the unchanged 10% “baseline” rate set in early April.
Other large US trading partners — most notably China and Mexico — received an extension to keep negotiating and won’t be hit with the new duties, but they will likely end up paying more.
The Trump administration has reached trade agreements with the EU, the UK, South Korea, Pakistan, Indonesia, Vietnam and the Philippines. Those countries have faced lower tariffs than earlier threatened.
Trump intends the tariffs to bring back manufacturing to the US, while also forcing other countries to reduce their trade barriers to US exports. Trump argues that foreign exporters will pay the cost of the tariffs, but so far economists have found that most are being paid by US companies.
– Stuff with AP