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We may have come out of light, but the global explosion radius will affect New Zealand’s exporters and investors, writes Catherine McGregor in today’s bulletin extract.
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‘It is not the worst result in the world’
In what he greatly stated “Liberation Day” and a “Declaration of Economic Independence,” President Donald Trump yesterday launched a 10% tariff on all the goods imported from New Zealand-Libertadores of local exports, presumably, the price competitiveness load in his second largest market. The rate, part of a comprehensive global package, should affect major industries, including dairy, wine and meat, although at this stage it is not right. There is also confusion about whether the 10% will be at the top of the existing tariffs or replaced them, with the executive order stating that it is “additional to current tariffs”, but Todd McClay minister saying that the correct figure is not yet clear.
Despite the uncertainty, McClay framed the result as relatively favorable, noting that “every country in the world faces a minimum of 10%”, reports Dan Brunskill in Interes.co.nz. Sense partners economist John Ballingall agreed, calling New Zealand’s fare “not the worst result in the world,” but warning that “some of the rates he imposing on other countries are absolutely huge and this points to a very significant impact on global growth.”
Authors’ economy teacher Niven Winchester gets so far as to suggest that New Zealand may even benefit from the trade war. According to your modeling published in the conversationIf all nations imposed retaliatory tariffs equivalent to the US, New Zealand families would be “better at $ 397 a year.”
The claim of 20% of the mystery
In addition to the complexity, is the Trump government’s statement that New Zealand imposes a 20% tariff on US goods – a number that McClay has pointed out is incorrect. New Zealand’s average rate of tariffs is only 1.9%and, even with GST included, it reaches only 17%.
The erroneous figure seems to result from a gross calculation used by the Trump team to create the rates they claim that each country charges in the US. At xUS journalist James Surowiecki was one of the first to realize that “they really didn’t calculate non -tariff rates + barriers, as they say they did. Instead, they just took our commercial deficit with this country and divided it into exports from the country to us.” SAM SACHDEVA OF THE WRITING Confirmed the math lines: the US deficit in 2024 with New Zealand was $ 1.1 billion, with $ 5.6 billion in exports from New Zealand – producing 19.6%, almost hits Trump’s number. How Luke Malpass of the post put it succinctly“The numbers they are using – as much of what the president says – seem bullshit.”
No NZ retaliation
New Zealand has no plans to implement US tariffs in retaliation, First -Minister Christopher Luxon saidAdding that climbing a trade war “is not good for New Zealand, it is not good for the world.” This diplomatic restriction contrasts with the most assertive responses in other countries. President of the European Commission Ursula von der Leyen announced The EU is “preparing for other contracted” to protect its economic interests, while China, Japan and South Korea work in a joint retaliation strategy. The first -Australian minister Anthony Albanese also ruled out retaliatory tariffs, but others, How Mark Carnery, from CanadaHe promised to act with “purpose and strength” to respond to Trump’s movements.
Stock market tank
US stock markets have fallen overnight, with S&P and Nasdaq experimenting with their worst negotiation days since September. Dow Jones is also severe and all three rates have been on their way to having the worst day since the 2022 inflation crisis, reports CNN. Global markets are also staggering the fears that the reaction of US business partners will bring down the global economy. The US dollar has been at its weak level since October. In theory, tariffs should increase the dollar, but traders are betting that “United States are creating a self -inflicted wound that would prevent their long -term growth,” says CNN. “They are ignoring all the rules of the classic micro and macro macro economy. This is the equivalent of the policy formulation of a suicidal bomber,” Michael Block market strategist told CNN.
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