New Zealand has lost some of its competitive edge in the United States after President Donald Trump hiked its baseline import tariff to 15% while leaving some countries at 10%.
Australia, the United Kingdom, Brazil, and the Falkland Islands have retained the 10% baseline rate, while others have lifted to between 15% and 40%.
This puts Kiwi exports at a disadvantage in several key categories.
New Zealand’s largest exports to the U.S. are red meat and wine, which compete directly with similar Australian products that now enter with lower import costs.
The United Kingdom recently secured a quota allowing 13,000 tonnes of beef to enter the U.S. duty-free before the 10% baseline tariff applies. This beef is typically destined for niche, higher-value markets, unlike the 150,000 tonnes New Zealand exports for bulk processing.
Brazil is another major red meat exporter but currently faces a 50% tariff due to political problems. But that could revert to 10% if the situation gets resolved.
Most European Union products—including wine and dairy—are still subject to a 15% tariff under a deal signed last week.
John Ballingall, a trade expert at Sense Partners, said the 15% rate was not ideal but many exporters were already shifting into markets such as the UK, Taiwan, Indonesia, and China.
“The overall impact is not likely to be earth-shattering, albeit painful for some businesses. Especially smaller ones with less ability to redirect,” he said.
Foreshadowed
Trade Minister Todd McClay warned on Thursday that New Zealand’s rate might rise to the 15% seen in various recent trade deals — but didn’t appear to anticipate other countries remaining at 10%.
“If the tariff rate for New Zealand and other countries goes to 15% tomorrow, whilst it won't be welcome, our exporters have adjusted well, and they tell me, we'll be able to deal with it,” he told reporters.
Many exporters have managed to pass the tariff on to US buyers without losing demand, while others have shifted some product to more lucrative markets.
“We are [also] hearing that in some cases, requests or inquiries out of China or the European Union have increased quite significantly,” McClay said on Thursday.
The minister is expected to make more comments on the new tariff later today
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.