US Correspondent Logan Church spoke with Finance Minister Nicola Willis in New York about the impact of tariffs on NZ’s economy.
Many Kiwis were likely first exposed to Donald Trump through his hit TV Show The Apprentice, which was first broadcast in 2004. I remember watching it on TVNZ back in the day.
At the end of the title sequence (over the song For the Love of Money by the O’Jays) was one of the show’s taglines – “It’s not personal, it’s just business.”
Just over two decades later, that is precisely what Donald Trump’s officials have told New Zealand after the president hiked the levy on all Kiwi goods that enter the United States.
Unlike many countries around the world, New Zealand has taken a softly-softly approach to dealing with Trump’s administration.
White House’ explanation for NZ’s surprise tariff jump – Watch on TVNZ+
So, you can imagine the frustration in our foreign affairs and trade offices when our tariff rate shot up to 15% from 10% – for no obvious reason at the time.
In goes our trade envoy to ask why. I like to think they went into that meeting with a pavlova or block of Whittakers chocolate in hand (and if they didn’t, we should rethink our foreign policy approach).
Not long after then, I caught up with Finance Minister Nicola Willis, who was visiting America on one of the Government’s semi-regular trips abroad to promote New Zealand business.
We met in one of midtown Manhattan’s bustling parks, where corporate workers stuff themselves with Chick-fil-A or a deli sandwich in their short lunch breaks.
It’s also a city filled with businesses that have Kiwi links, and there’s only one subject on many business owner’s mind – tariffs.
New Zealand’s trade envoy hears similar advice in the White House to what contestants were told on TV’s The Apprentice. (Source: 1News)
Willis told me: “Our trade envoy was in Washington DC in the recent days, and it’s very clear that while New Zealand continues to be viewed well by the US administration, a blanket rule was applied when it came to 10 and 15% differential. Essentially, we sell more to the US than we import, which makes us different to Australia or the United Kingdom which were able to achieve a lower tariff rate.
“That rule was applied in a very blunt fashion – there were no exemptions, and New Zealand fell victim to that.”
The devil, of course, is in the details of any such discussion – I asked precisely what our envoy was told by their US counterparts.
“The American administration has reinforced that they very much do value the New Zealand relationship and that there was nothing personal about this decision and didn’t reflect anything New Zealand had done wrong or that we were perceived badly.”
In fact, some US officials apparently felt sorry for us.
“I understand some of those in the US administration have expressed sympathy for the New Zealand position because they understand that we are a good trade partner, we are good to deal with, and they didn’t want any implication that we should be punished in any way,” Willis continued.
She wouldn’t be drawn on who those sympathetic officials in the Trump administration were.
“The administration was quick to express back that they value New Zealand, and we can understand why you are feeling aggrieved.”
Similar sentiments were expressed in a press release from Trade and Investment Minister Todd McClay, who visited Washington DC to meet with trade counterparts this week.
Ultimately, despite whatever advocacy work successive NZ governments do in the United States (the Finance Minister herself enthusiastically gave me a list of Kiwi products sold in the US she loved before remembering that promoting any product was a breach of NZ Cabinet rules), New Zealand has little leverage over the economic powerhouse of America, our second biggest trading partner (after China).
American consumers spend more on premium products – and there are a lot of American consumers. We are also technically neighbours across the Pacific Ocean.
Small countries that tried high-level negotiations were often struck with even higher tariffs – Switzerland is one example, Willis said.
Too little, too late?
Labour’s finance spokesperson Barbara Edmonds told me her party would have approached this very differently.
“As soon as those tariffs were announced, New Zealand should have sent their most senior government ministers to be able to have that discussion with the US administration to understand why was it 10%. What are the things that New Zealand could do? Could they negotiate to bring it down? Or what were the reasons behind it?
“It’s quite clear that they’re just out of touch and were not at the table making sure that they had Kiwi businesses at the heart of their negotiations.”
I asked Edmonds if a harder approach might have backfired and led to New Zealand being slapped with even higher tariffs.
“They’re the Government. It’s their job to be the voice of New Zealand and Kiwi businesses. It’s quite clear that no one was being their voice. They walked in again at 10% and now it’s been lifted to 15%. Where was our advocacy for our Kiwi businesses?”
Regardless of which approach would have been better, the current situation leaves NZ with a few options. These include looking for other markets or trying to convince Americans to absorb the added costs.
It is a quandary many in our highly prized and profitable red meat export industry, which has grown their American exports into the billions of dollars a year, are facing.
I spent some time chatting to Kiwi farmers and red meat industry leaders, who told me that increase from Trump’s initial 10% tariff to 15% will bite.
“We are deeply disappointed, it’s going to be wee bit of a challenge,” said Sirma Karapeeva of the NZ Meat Industry Association. She’s also part of the American Chamber of Commerce in New Zealand.
“US importers put quite a large pre-order in before the tariffs, so that is working its way through the system. But it also means we haven’t been exposed to the full 15% tariff impacts so I can’t really tell you how that will play out,” she said. “But I can say it has put us at a clear commercial disadvantage, particularly with regards to our competitors like Australia, which maintain the 10% tariff rate.”
What was keeping things going, she said, was that demand for New Zealand meat remained high and prices were “good”. Companies were also reaching out to different markets.
“We export to 120 markets around the world – so, in terms of options, we’ve got that. The challenge is finding the markets with the best dollar for our exports as that is what drives our economy here.”
Karapeeva said the fact New Zealand has comparatively open access to much of the world has made it easy to pivot in other times of economic uncertainty. She gave the example of the Covid pandemic, when NZ meat stuck on container ships, unable to enter China, was able to be diverted and sold to other destinations in the Asia-Pacific region.
The only certainty is uncertainty
Donald Trump has been consistent in his view that tariffs will make trade fairer for the United States, improve the domestic economy, create jobs etc.
It certainly seems to be raking in the cash – figures on Fox News today showed more tariff income has been collected by the federal government so far in 2025 than in all of 2024.
However, it has also created a lot of financial uncertainty around an increasingly connected world and ushered us back to the days of economic protectionism from the early 20th Century.
Uncertainty is the enemy of economic prosperity – and as a trading nation we feel that keenly.
But is it all doom and gloom for New Zealand?
Through most American cities you’d be hard pressed to find a restaurant or bar not selling a New Zealand Sauvignon Blanc – and I haven’t seen anyone racing to take it off their menu just yet.
And lower than normal herd sizes have created a demand for high quality beef – which New Zealand has.
Even in the mighty cheese producing state of Wisconsin, I found New Zealand cheese in a prominent place in a Madison supermarket.
Nicola Willis also pointed out the new tariffs don’t affect $7 billion worth of service exports each year.
That said, the only thing certain in these times – and especially in global trade – is that you can’t really be certain about anything anymore.
White House’ explanation for NZ’s surprise tariff jump – Watch on TVNZ+
