Last week, President Trump announced his Administration’s ‘Reciprocal Tariffs’ policy, imposing a 10 percent tariff on all imports of goods.
Many countries face much higher tariffs on a reciprocal basis. New Zealand exporters will face a 10 percent tariff rate, which took effect over the weekend.
"While this is a significant development, New Zealand remains competitive against other exporters in the U.S. market. New Zealand’s interests are best served in a world where trade flows freely,” said Minister of Trade and Investment Todd McClay.
“While these tariffs create additional costs that will largely be passed on to consumers, New Zealand is in a stronger position than many other countries, some who are facing higher tariff barriers. This reinforces the importance of our work to create new trade opportunities and reduce barriers for our exporters in the EU, UK, UAE, GCC and most recently India."
Law firm Minter Ellison Rudd Watts has issued an update on these announcements that provides practical recommendations for New Zealand exporters seeking to protect their market positions in the US.
The US market is the second-most important destination for New Zealand goods exporters, accounting for about 13 percent of New Zealand's total exports in 2024. Last year, New Zealand exported nearly NZD 9 billion worth of goods to the US, including meat, dairy products, wine, and machinery.
The US import tariffs will raise the cost of New Zealand goods in the US market, making them less competitive than local products or those from countries with lower tariffs. This could decrease demand for New Zealand exports, potentially reducing sales and impacting the revenue of New Zealand exporters.
However, some New Zealand exporters might find that these announcements improve their relative position in the US market, as their primary export competitors are being hit with even higher US import tariffs than New Zealand.
New Zealand companies that export to the US via foreign subsidiaries or contract manufacturers will also need to check the US reciprocal tariff imposed on their country of export. Those exporting goods from China will now face a minimum US import tariff of 54 percent.
Unlike some countries, New Zealand is unlikely to retaliate against reciprocal tariffs by imposing new import tariffs on US goods. Instead, New Zealand is more likely to respond via bilateral discussions and multilateral channels, seeking reconsideration, exemptions, or resolutions without escalating tensions.
More global news here
