New ‘club’ of countries to emerge from US tariffs chaos, and NZ should join, economist says
Saturday, 5 April 2025
A new ‘club’ of countries will likely emerge from the US tariffs chaos, Shamubeel Eaqub says.
New Zealand should join this group for future posterity, the Kiwi economist says.
Eaqub says he “truly believes” it will happen, as a new rules based order and group provides a trading alternative to the US.
A new ‘club’ of countries seeking a rules based order for trade will emerge out of the US tariffs chaos, Kiwi economist Shamubeel Eaqub says.
The group of countries would provide an alternative to the post World War II US-led order, and NZ should join, the local economist said.
The comments came on RNZ’s Saturday morning radio show from the Simplicity chief economist who was speaking about the ongoing trade wars.
He said we should “assume the global economy is going to go through a very tough period” and falling back into a recession was still a “very big risk” for New Zealand.
US markets continued plummeting Friday (NZT Saturday) on the back of the tariffs announcement by US President Donald Trump on Wednesday (NZT Thursday).
The S&P 500 lost 9% of its value in two days, its worst performance since the start of the Covid-19 pandemic when a shock was sent through markets in March 2020.
US Federal Reserve chairman Jerome Powell said on Friday that the tariffs, and their likely impacts on the economy and inflation, are “significantly larger than expected.”
He also said that the import taxes will probably lead to “at least a temporary rise in inflation,” but added that “it is also possible that the effects could be more persistent.”
New Zealand got off lightly compared to other countries, being handed the baseline 10% tariff. Meanwhile China was given the rate of 34% and the European Union was given a 20% rate.
Looking for the way forward
The real opportunity now was joining forces with other countries who had been hit hard by the tariffs, Eaqub said Saturday.
“These other countries that have been affected will want to create a club that's stronger, deeper and with fewer barriers.
“We want to be in the second club that is going to rise on the back of the US, retreating from this global trade order.
“I truly believe that there is going to be a new group of countries that will come together that will try to build a parallel system that is rules based, that is consistent, that is friendly. And I think we really want to be part of that, because that's what will give us resilience, and that will give us, I guess hope for long term prosperity.”
On Friday morning US time, Trump was spotted at Mar-a-Lago, his private club in Palm Beach, to play golf. He spent Thursday in Miami at another one of his golf courses, where he attended a Saudi-funded tournament.
Senate minority leader Chuck Schumer said Trump was in a “billionaire bubble”.