New Zealand remains optimistic about its trade relationship with the United States, despite the looming threat of global tariffs proposed by former U.S. President Donald Trump.
Speaking to CNBC’s Squawk Box Asia, New Zealand Finance Minister Nicola Willis emphasized the strong and balanced trade ties between the two nations. “New Zealand is distinguished in that we have a very balanced and complementary trade relationship with the United States,” she said, expressing hope for continued positive engagement.
Willis highlighted the reciprocal nature of trade, noting that the U.S. imports key New Zealand products such as meat and wine, while New Zealand imports a significant volume of American goods and services.
Trump’s Tariff Threat and New Zealand’s Trade Position
Trump recently announced plans to impose a 25% tariff on global steel and aluminum imports, escalating previous threats of tariffs on Canada and Mexico.
According to New Zealand’s Ministry of Foreign Affairs and Trade, the U.S. has become the country’s second-largest export market, surpassing Australia. In the 12 months ending March 2024, New Zealand exported NZ$14.6 billion ($8.26 billion) in goods and services to the U.S., while importing NZ$11.4 billion, resulting in a trade balance of NZ$3.5 billion. The total trade value between the two countries stood at NZ$25.8 billion, not adjusted for inflation.
Willis described the economic relationship as mutually beneficial, adding that New Zealand’s role in the “Five Eyes” intelligence alliance—which also includes the U.S., U.K., Canada, and Australia—further strengthens strategic ties between the nations.
New Zealand’s Response to Potential Tariffs
When asked whether the country could avoid Trump’s tariffs, Willis acknowledged that trade policy decisions rest with the U.S. administration. However, she affirmed New Zealand’s readiness to respond to any new trade barriers if necessary.
She also pointed to the exchange rate as a potential buffer, stating that a weaker New Zealand dollar could help exporters by making their goods more competitive in international markets. The kiwi recently fell to its lowest level in over two years against the U.S. dollar, trading at 0.5515 on February 3.
While acknowledging New Zealand’s “significant current account deficit,” Willis emphasized that the country’s flexible exchange rate would help mitigate the impact of any economic disruptions.
As global trade tensions persist, New Zealand remains committed to maintaining strong economic ties with the U.S., even as it prepares for potential challenges on the horizon.
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