Prime Minister Christopher Luxon has made his strongest condemnation yet of US President Donald Trump's tariffs, denouncing a shift away from agreed rules and the risk of a global trade war.
Luxon delivered the prepared remarks to reporters, before heading into a caucus meeting at Parliament on Tuesday morning, warning of the potential fallout from a "profound shift in the global economic landscape".
"We've all seen the immediate impact on KiwiSaver balances, but wider than that, it is hurting growth prospects at a time when the global economy needs certainty and confidence, not uncertainty."
Trump's tariff plan this week sent markets tumbling, with losses comparable to the global financial crisis, the arrival of Covid-19 and the 1987 Black Monday crash.
The Prime Minister assures New Zealand is well positioned amid the uncertainty. Photo: RNZ / Samuel Rillstone
Speaking at the White House on Monday, Trump doubled-down and threatened China with an additional 50% tariff, if it did not withdraw a countermeasure.
Luxon told reporters he and his government would be the "biggest advocates for free trade on the world stage".
"What actually is concerning me is the shift away from agreed rules and the risks of actually backsliding into a global trade war," Luxon said.
"A trade war is, frankly, in nobody's interest. It will slow global growth, it will hurt jobs and it will reduce the amount of money we have in our wallets."
Meanwhile, Finance Minister Nicola Willis held a press conference to discuss what effect the tariffs would have on the economy.
Photo: ARNE DEDERT / AFP
Willis warned global inflation could rise by as much as 0.5 percent in response.
There were currently no plans to change the May Budget in response to the profound shift in the economic landscape, but Willis has warned of tough times ahead.
Speaking to reporters a short time ago, Willis said it is clear we were witnessing an "historically significant global event".
She said while New Zealand exporters have been hit modestly by the tariffs, Asian markets had been significantly impacted.That would inevitably affect demand for New Zealand exports.
Photo: Reece Baker
Luxon also offered some reassurance to New Zealanders, stressing the country was well positioned with competitive farmers and exporters, as well a network of trade deals.
"We have a strong history of advocating for an open, rules-based trading system, and I will work with like-minded countries to promote free trade as a path to prosperity for New Zealanders and for those that we trade with.
"Yes, we're entering choppy waters, but we step into that from a very strong base and, with that, I'd say that New Zealand's best days actually lie ahead of us."
A similar pre-recorded message was pushed out across Luxon's social media channels on Tuesday morning.
Responding to reporters' questions, Luxon said his message was intended to reassure New Zealanders that the government's economic plan would get the country through "another round of very very tough economic circumstances".
Next month's Budget would not need rethinking as a result of recent events, Luxon said.
"We're very comfortable with what we're doing as we set up for the Budget, but we're just also acknowledging that there is a higher level of global risk and uncertainty... that will be a choppier and a more dynamic environment."
Luxon said his personal view was that the US economy was going to go through a "power of pain" with huge costs being heaped on US consumers.
Labour calls on coalition to speak up for NZ
Also addressing reporters on Tuesday morning, Labour leader Chris Hipkins said the government's "quiet" response to date had not worked in New Zealand's interest.
He said the tariffs being imposed on New Zealand were "unjustified and based on a lie".
"[The coalition] could start by speaking up for New Zealand," he said. "It's not the sort of thing friends do to each other."
Hipkins said just a few months ago Luxon and Foreign Minister Winston Peters were calling for a "much closer relationship with the United States".
"Donald Trump's politics certainly align more closely with Winston Peters' personal view of the world," Hipkins said.
"I don't think that's an approach that's going to be in New Zealand's best economic interests though."
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