US President Donald Trump holds a signed executive order after delivering remarks on reciprocal tariffs during an event in the Rose Garden entitled "Make America Wealthy Again" at the White House in Washington, DC, on April 2, 2025. Photo: SAUL LOEB / AFP
Some of New Zealand's biggest exporting industries to the US are still coming to grips with the Trump administration's tariffs announcement, and say it's too early to tell what impacts it will have on businesses.
New Zealand will pay a 10 percent baseline tax when it sends products to the US, amidst sweeping tariffs imposed by the US - with rates between 20 and 50 percent for countries judged to have major tariffs on US goods.
Last year, the US surpassed Australia to become New Zealand's second largest export destination with a total trade value of $9 billion.
Representatives from the meat, dairy and wine industries say while the move has been well signposted and comes as no surprise, it remained disappointing.
The Meat Industry Association's CEO Sirma Karapeeva said it is unfortunate that New Zealand has been caught in the escalating global trade wars.
She said the relatively low tariffs on New Zealand means its businesses can remain competitive, but there is need for more analysis on what the tariffs could mean for New Zealand.
New Zealand's meat export value to the US was estimated at $2.7 billion in 2024, and the association projects the cost of tariffs could increase 17-fold - from $15.9m paid in 2024, to $277.1m based on the new rates.
Karapeeva said there are concerns around potential knock-on effects on competition in other global markets.
"As countries get locked out of one market they look to divert products into other markets, including some of the key markets that we trade into, and that has a knock-on effect, but we are doing scenario planning and having a good look at what that might mean for us."
Karapeeva said New Zealand companies have been working with customers overseas to look at how to best manage any shocks that might come as a result.
She said they will continue to look for the best returning markets, including the US.
The Dairy Companies Association's CEO Kimberly Crewtherm said the announcement is disappointing, particularly given that the US already maintained relatively high tariffs on dairy imports.
She said while they're waiting for finer details of how the new tariffs will be implemented, she understands that the 10 percent will come on top of existing tariffs.
Crewtherm said it's difficult to say at this stage what the impacts will be.
"There's still water to flow under this bridge, what we do know is that we have a very long history of navigating a quite challenging trade environment, globally for dairy."
New Zealand Winegrowers' CEO Philip Gregan said while the industry hoped for no tariffs, it accepted the reality.
"It could've been worse, but 10 percent is still 10 percent, and we'll have to live with the consequences."
Gregan estimates that New Zealand exports $750 million of wine to the US each year, and will be potentially paying $75m in tariffs.
"We just don't know at the moment what the impact is going to be in market, we don't know some other countries got higher tariffs, we really don't yet fully understand how everything gonna play out,
"Yes we know a number at this stage, but there's still a lot of watching and waiting to understand how the markets will respond," he said.
However Gregan said he has confidence in the appeal of New Zealand's product to help withstand the challenges.
"Our wine in the United States hasn't been cheap, and in wine markets around the world, our wine doesn't sell because it's cheap, it sells because it's very high quality, distinctive, sustainable, as I say those fundamentals haven't changed."
Economist and lecturer at AUT Professor Niven Winchester said New Zealand has been hit by a relatively low tariff, and that might give it some advantages in certain areas.
However, he said the knock-on effects on the global economy will still be felt.
New Zealand International Business Forum executive director Stephen Jacobi. Photo: supplied
"The big worry for New Zealand is the global trade war, where everyone's a little bit less well off and buying less of everything from everywhere," he said.
New Zealand International Business Forum executive director Stephen Jacobi hoped the tariffs would galvanize the rest of the world to realise the world was bigger than just the United States.
"We need to fill the vacuum created by the loss of leadership on trade, and work very hard together to open up new markets, reduce trade barriers, reduce the cost of doing business, and show the United States what they're missing out on," he said.
Jacobi said New Zealand would be nimble and flexible in how it responded.
He backed the government's response to not retaliate, and to correct the record in the US about the tariffs applied in New Zealand.
Some of the countries facing the biggest brunt of the tariffs may face some economic contraction, which may affect consumer spend on New Zealand products.
"If consumers have less money, yes they will spend less on kiwifruit, on eating lamb when they go out for dinner, buying New Zealand wine, and having really flash milk-based drinks when they go out for coffee.
"But I think that is some way down the track, because these effects take some time to work through.
"The impact on some of our other markets could be quite great, but there could also be opportunities opening up in different parts of the world as a result of this, is always another way to look at these things. And business is always good at finding those out."
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