Photo: RNZ / Rebekah Parsons-King
Exporters around the world are still digesting exactly what US President Donald Trump's moving array of tariffs will mean for them and their businesses.
But what are New Zealand's biggest exports to the US, and how might they be affected?
Last year, exports of goods to the US were worth just under $9 billion.
That was 12.7 percent of all goods exported, the second highest. The US has become a much more significant destination for exports in recent years.
In the 12 months ended December 2024, these were the most exported goods to the US.
1. Meat and 'edible offal' - $2.5 billion
Westpac chief executive Kelly Eckhold said beef was a tricky import for the United States to replace.
Both New Zealand and Australia were exporting large amounts of lean beef to the US, he said, which was then mixed with fattier beef to make burgers and mince. "The do that because it makes the products better so it's actually not that easy for Americans to not buy our beef because they don't have the same product, basically."
Gareth Kiernan, chief forecaster at Infometrics, said beef was $1.8b of the meat exports to the US and 42 percent of all of our beef exports were going to that country.
But he agreed that US consumers were not likely to be able to switch to home-grown beef easily.
"Beef cattle numbers there are at a 70-year low. Therefore, the effects on returns to beef farmers could be relatively limited.
"That's been partly behind the growth that we've managed to achieve there over the last few years. And put it this way they're still going to continue eating… You know, they like their hamburgers, don't they?"
Westpac chief economist Kelly Eckhold. Photo: Newshub
ASB chief economist Nick Tuffley said how much impact a tariff had would depend on the dynamics of what was being exported, what the alternatives were for the US and whether the export was a final good or a part of something more substantial.
He said if beef was sold through fast food chains, it would only be a percentage of the meat in each burger affected.
"The impact on the final consumer price is not going to be as substantial. That's one example where with beef it may be reasonably resilient, at least the hamburger part, because it's just one small part of the bit people are eating."
2. Dairy - $982.9 million
When it comes to dairy, the bigger impact may be on what happens to trade between the US and China, which is facing hefty tariffs.
Eckhold said there was significant trade of both dairy and beef between the two countries. "That has the potential to be significantly disrupted with the very high level of tariffs in place."
If China did not want to accept those imports anymore, they would have to come from somewhere else and that could benefit New Zealand, he said.
3. Beverages - $742.7m
Wine makes up the majority of beverage exports to the US.
"For wine, the potential tariffs come at a difficult time, as the industry has already been grappling with softer global demand and softening prices over the last couple of years," Kiernan said.
"Higher prices for foreign wine in the US could easily see consumers switch from drinking a Hawke's Bay syrah to a Californian zinfandel, further hitting demand for our product."
He said wine demand had dropped in recent years anyway.
"We've all stopped drinking quite as much as we did in the pandemic when we were stuck at home.
"That's a global story really, but it's much easier for them to switch to American-produced wine given the sort of current supply and demand dynamics and the broader market."
Tuffley said wine had all its value added in New Zealand.
"In that scenario that's where the potential impact of the tariff could be bigger because it's going to be harder for the end retailer to pass on the impact if they do mark it up.
"If it's lower down the value chain where there's lots of competition and people are quite price sensitive a price increase might mean sales slow quite a lot or it may be there is a lot of pushback from the importer saying 'we can't sell this unless you are prepared to drop your price to cover a fair chunk of the tariff'. In that case you're getting a volume hit or some degree of a margin hit."
4. Mechanical machinery - $683.7m
Tuffley said how much mechanical machinery exports were affected depended on how critical the use was it was put to and whether there was US alternative.
5. Albuminoids starches and glues - $448m
6. Electrical machinery- $439m
7. Optical medical and measuring equipment - $390m
Much of Fisher & Paykel Healthcare's exports are likely to be captured in this category.
But Eckhold said he had been at meetings recently where firms who were exporting medical equipment into the US were concerned about what the tariffs might mean. He said while the volumes were not huge, it illustrated that a wide variety of trade would be affected.
8. Wood - $370.7m
9. Fish - $334.1m
10. Fruit and nuts - $307.1m
Tuffley said seasonality drove a lot of US imports of fruit and nuts. He said it was mainly kiwifruit and apples being sold into the US for its off-seasons.
Kiernan said the US could end up priced out of the market for fruit out of season.
Eckhold said there was still a lack of clarity about how the regime was going to work in aggregate.
He said the US worked with a system of quotas that applied to countries and different sorts of products. Exporters he had spoken to were not clear how those quotas would work in conjunction with tariffs.
He said it was also still uncertain how much of the tariff would be passed on to US consumers and how much would be carried by the exporters.
Firms were waiting to see what happened, he said. "No one wants to be the first person to put their price up."
Tuffley said the main competition for New Zealand exporters would be US suppliers. Those from other countries were facing the same tariffs, or greater.
In some cases, New Zealand companies might look at options to shift some production to the US, if the cost of doing so was less than the cost of the tariff.
But he said a key question would be what happened to the tariffs in the future. There were questions about whether they would outlast Trump's "negotiation" phase, he said, or whether they would remain in place beyond his presidency.
"That matters a lot because it wouldn't be worth spending a lot of money to find alternative solutions, only to find the rules change down the track. It's hard to figure out what the optimum long-term solution is to enact when you have very little clarity around what tariffs we are facing and for how long."
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