The New Zealand stock exchange has taken a big hit today – falling a total of 3.53% by the time it had closed this evening.
The falls being seen here and overseas haven’t been experienced since the start of the pandemic in 2020 caused markets to tumble worldwide.
Earlier today, the Australian sharemarket was a sea of red with shares plunging more than 6% at the opening bell. This wiped more than NZ$160 billion off the value of the index.
Japan’s Nikkei fell by more than 8% shortly after it opened.
In Hong Kong, the Hang Seng Index had fallen 12.61% by 6.15pm NZ time.
The NZ dollar has also fallen further today, sitting at 56 US cents this evening.
That mirrored the picture across the Tasman where the Australian dollar traded at 60 US cents.
The last time the Aussie dollar traded this low was for a few days in March 2020 and one day in April 2020.
Trillions of dollars have been wiped off US markets since US President Donald Trump announced widespread tariffs on goods imported into America.
US stock futures dropped further on Sunday evening local time as the tariffs continued to roil the markets. Dow Jones Industrial Average and S&P 500 futures fell nearly 4% while Nasdaq futures were down nearly 5%. Even the price of bitcoin, which held relatively stable last week, fell nearly 6% on the day.
Trump’s new tariffs on New Zealand goods – and those from around the world – took effect over the weekend.
Trump said Sunday (local time) that he won’t back down on his sweeping tariffs on imports from most of the world unless countries even out their trade with the US.
Speaking to reporters aboard Air Force One, Trump said he didn’t want global markets to fall, but also that he wasn’t concerned about the massive sell-off either, adding, “sometimes you have to take medicine to fix something”.
“I spoke to a lot of leaders, European, Asian, from all over the world.
“They’re dying to make a deal. And I said, we’re not going to have deficits with your country. We’re not going to do that, because to me a deficit is a loss. We’re going to have surpluses or at worst, going to be breaking even.”
New Zealand faces a tariff of 10%, on the low end of what Trump calls “reciprocal tariffs” for 185 countries across the world.
NZ exports about $9 billion worth of goods to the US, meaning the cost of a 10% tariff would be about $900 million to exporters.
The tariffs sent international markets reeling with losses similar to the 1987 Black Monday crash, the global financial crisis in 2008, the arrival of Covid-19 in 2020.
Prime Minister Christopher Luxon said on April 3 that the impact would not so much be with the US trading relationship but what the tariffs would mean for global economics.
TRADEWAR_LUXON_MON_0704 Tariffs, trade wars ‘not good’ for world economies – Luxon The Prime Minister said he didn’t want New Zealand businesses “punished” by a higher level of inflation than necessary. (Source: Breakfast)
“Let’s be clear, tariffs and trade wars are not good for global economics. New Zealand is a country that has done well without tariffs, as has the rest of the world.”
Announcement documents from the Trump administration claimed New Zealand subjected US exporters to a 20% rate and that the US was applying a 10% tariff in response.
Trade Minister Todd McClay said New Zealand did not subject US exports to a 20% tariff, and that the rate was much lower at an average of “about 1.9%”.
Luxon told Breakfast today that New Zealand would keep talking with administration officials and wouldn’t be hiking tariffs on US goods coming into NZ.
