Nicola Willis said communications channels were open between New Zealand and US officials. Photo: Reece Baker
Finance Minister Nicola Willis says she understands the 10 percent tariff remains and diplomats are working "at pace" to clarify the situation.
"We have channels of communication between officials open", which was allowing officials between the US and New Zealand to speak with each other and "clarify our position", she said.
Since Donald Trump's announcement of tariffs on many countries a week ago, it has caused "a significant economic event on a global scale", Willis told Morning Report.
She said the imposition of the tariffs by the US was "extraordinary", leading to retaliatory action by others, and "big uncertainty in global markets", and "ongoing volatility and uncertainty".
When there was uncertainty it was very damaging to the global economy because traders and investors needed to know what the conditions were to do business, she said.
"And it's been very hard for anyone to know what that is this week."
With China being such a major trading partner for New Zealand and now the target of 125 percent tariffs from the US there would undoubtedly be repercussions for New Zealand.
"Events that occur there have impact for us and the same for the United States."
Having China and the US going "tit-for-tat" in a trade war was very destabilising for the world and "a real headwind for New Zealand".
Asked if New Zealand should separate itself more from the US, she praised the approach taken by successive governments which had involved lining up as much trade as possible with other countries.
"That's the right approach ..."
Willis said she was monitoring the bond market closely and while they had dropped sharply when the tariffs were announced they had risen a bit in recent days.
It was too soon to know where it was all going to settle to, she said.
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