Minister of Trade David Parker says New Zealand should be concerned about the escalating tit-for-tat trade war between the world’s biggest economies.
On Wednesday morning (NZ time) US President Donald Trump said he will be slapping another $US16 billion worth of tariffs on 279 Chinese products.
The latest move brought the total value of tariffs the US has imposed on Chinese products to $US50 billion.
China has yet to respond, but NZ International Business Forum Executive Director Stephen Jacobi is expecting the People’s Republic to reply with more of their own tariffs soon.
“If the Americans decided to put on additional tariffs, China will respond in kind.”
Parker says as the situation continues to escalate, New Zealand should be concerned.
“Some of the flow on consequences include the many billions of dollars of subsidies that are, as a consequence, having to be given to the US farmers and that further distorts world trade,” he says.
“We don’t think rising protectionism is in the interests of either the world or the New Zealand economy.”
On Wednesday morning, Finance Minister Grant Robertson warned that if the tit-for-tat tariff retaliations continue, it will impact New Zealand.
Speaking to media before going into the House later that day, he said this was a “significant issue.”
“We rely on a rules-based system as a small exporting country and if this expands further into a trade war, that will inevitably impact on confidence in the global market.”
But he says this is an issue that is “beyond New Zealand’s control that can have a significant impact on us.”
That impact, however, is hard to quantify at this stage, he says.
“But if this keeps going, it will have an impact on New Zealand because we have a reliance on our export market to drive our economy.”
And will this issue continue escalating?
“Oh, absolutely,” Jacobi says.
“The more that the US expands the scope of these tariffs, I believe the greater harm it will do to us over time.”
National’s Trade Spokesman Todd McClay agrees with both Parker and Robertson that this situation is a concern for New Zealand.
“The real concern for Kiwi companies is if China is able to trade less with the US, their products are going to go somewhere else and New Zealanders will have to compete, often unfairly.”