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A screen in the German stock market, showing US President Donald Trump, while the world faces the ongoing news of commercial imports to the US.
Photo: Daniel Roland / AFP
New Zealand and many of the world economies have a ring seat of what may be the largest trade war on the front of two giants seen in recent history.
The unexpected Retreat from the White House about its main policy of leveling the global commercial playing field, pausing its punitive tariffs against trade partners for 90 days – except China, has a wrong foot many countries.
The White House is spinning the pivot as part of a calculated plan, which brought criminals in series by the dozen to the negotiating table to negotiate agreements, although it may be too early to start making a victory lap.
However, the informed opinion suggested the threat of increasing those wholesale interest rates and growing dysfunction in debt markets – which brought back the memories of the global financial crisis and pandemic paradise Covid – is a more likely explanation for switchback.
Verification of reality
The reality is that New Zealand is suffering a 10 % tariff in exports to the US, which means the economy faces a nominal hit of $ 900 million to export earnings – about 2 % of the value of our economy.
Therefore, the US faces New Zealand companies that sell in the US (such as Fisher and Paykel Healthcare and Skellerup), or with significant interests there (including the Mainfreight Logistics Operator), remain.
Analysts are trying to attract some comfort by saying that the ad and the consequences may not be so bad in a kingdom, where the best news is good news.
Tariffs are widely considered to be likely to cushion US and world growth, boosting inflation, possibly even causing recession, which is currently a 50-50 chance in the eyes of many.
Opportunities may be for New Zealand to take market niches, as other nations move away or have prices out of the US market and that this country can receive offered goods that are displaced from Chinese or US markets.
But the perspective of New Zealand’s two main business partners, which buy almost a third of our exports, facing a commercial slugfest is annoying and worrying.
The risk equation versus opportunities is insoluble at this stage, but as the African saying says. When two elephants fight, the grass is trampled.
NEW ORDER TRADE WORLD
The government has exhibited some quick and agile political work to reassure families and companies that it is in this case, warns of risks, and looking for countries that think the same way they believe in rules -based trade.
New Zealand and Australia are leading a search for free trade supporters, attracting people like the European Union to cooperate with, if not necessarily enter, the 12 Nation Comprehensive and Progressive Agreement for Transpacific Partnership (CPTPP).
The impulse to make a free deal with trade with India can gather more impetus and, along with the common market group in South America, sometimes has long been mentioned.
The World Trade Rules Book, which has been looking for dogs and worn out for many years, has been destroyed by US tariffs, but the World Trade Organization (WTO) still has some position and offers a structure that covers about two thirds of world trade that can be used to mitigate part of the turbulence.
Stew Leonard’s Lamb special
At the most practical level, they are small traders who face the financial reality of tariffs and seeking ways to get around or minimize their impact on families.
Stew Leonard, a realistic grocery store with a supermarket in Yonkers, New York, sells Lamb – New Zealand Lamb.
It’s especially this week for about $ 28 per kilo, but maybe not much longer.
“With Easter coming, obviously we have the New Zealand Lamb here, which is great now … We also have the American Lamb, and we are making provision to move all our purchases to the US,” Leonard told CNN.
It is likely that tariffs signify that there is much more Leonards scattered throughout the US.
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