Don’t poke the bear: NZ’s calm amid confusion over Trump tariffs

Thursday, 3 April 2025

ANALYSIS: There was a slight game show vibe to the Liberation Day affair as President Trump scattered his tariffs across the globe.

A MAGA hat spot prize was thrown to auto workers in the crowd, a large colourful placard displayed who’d get hit with what.

And as Donald J Trump played bingo with the world’s economy, New Zealand’s trade and foreign affairs specialists were glued to screens trying to spot New Zealand on the card and locate then assess the damage.

Attempting to discern your country’s economic fate from a live television show is quite frankly bonkers.

An hour after the tariffs were revealed, a still slightly perplexed trade minister emerged in New Zealand’s Parliament to explain as much as he could.

In short - it wasn’t much. Officials were still trying to clarify whether the 10% tariff levelled at New Zealand would be a flat blanket rate or whether it would be stacked on top of current tariffs. Trump says they’ll be stacked, Trade Minister Todd McClay wasn’t so sure.

The 10% rate was based on a claim by the White House that New Zealand imposed a 20% tariff on US imports, which left the Beehive scratching its head.

US exporters face an average 1.9% tariff for sending goods into New Zealand, even adding our 15% GST onto that, it doesn’t reach the 20% claimed by Trump.

But, despite the confusion and mistaken tariff rate, New Zealand is taking a calm approach.

“Well, we won't be looking to retaliate, because that will put up prices on New Zealand consumers,” McClay said.

Foreign Minister Winston Peters went further, labelling it a “day of celebration” and paying tribute to his diplomatic team, saying without their foresight and careful engagement we could have been much worse off.

It's a very different take than our closest international ally Australia, whose prime minister lashed out calling the tariffs “unwarranted” and “not the act of a friend”.

Some reporters almost seemed to be goading our trade minister into taking a similar stance, but of course Anthony Albanese’s tough talk is due to domestic politics.

Albanese is in the middle of an election campaign - New Zealand’s domestic political schedule is clear for a cooler head.

Our composed, or even celebratory, approach doesn’t amount to a lack of concern for exporters, rather an acknowledgement that we have got off reasonably lightly.

Among countries where a tariff has been applied, 10% is the lowest and is understood to be about the best the Beehive would have anticipated.

Winston Peters went as far as to say: “There is no country in the world that’s done better than us.” (That does ignore our realm country Niue who has seemingly escaped tariff free.)

Of course all tariffs are bad tariffs for a small trading nation like New Zealand - especially for particular industries. The US is the largest market for New Zealand's red meat, worth $2.7 billion last year.

But there are glimmers of hope, for instance McClay has asked officials to clarify that New Zealand does not impose a 20% tariff rate on US imports as stated by Donald Trump this morning - the explanation of the actual average rate of 1.9% could allow gentle negotiation.

As New Zealand is one of those that’s hit with the lowest rate, we are no less competitive than any other country exporting into the States. Up against those facing major tariff hikes, our products could be more attractive.

Plus, sometimes from disaster comes opportunity.

Any countries that retaliate and put tariffs on US goods will be looking for substitute products, possibly opening the door for Kiwi exporters in other markets.

No one outside the US is feeling liberated, but way down here in Aotearoa there is a little cause for a cautious sigh of relief.