According to Finance Minister Nicola Willis, New Zealand’s trade ties with the U.S. are unique in their balance and complementarity, positioning the two nations in a strong trade partnership. She highlighted that the U.S. imports significant amounts of New Zealand’s meat and wine, while New Zealand also imports a variety of goods and services from the United States, creating a mutually beneficial trade dynamic.
Despite potential global tariffs that could impact many countries, including New Zealand, the country is hopeful about maintaining positive trade relations. Trump’s recent announcement of a 25 per cent tariff on steel and aluminium imports, as well as his ongoing threats of tariffs on Canada and Mexico, has raised concerns globally.
However, Willis pointed out that New Zealand has a healthy trade relationship with the U.S., with exports to the United States valued at NZ$14.6 billion for the 12 months ending in March 2024. This has made the U.S. New Zealand’s second-largest export market, surpassing Australia. In return, New Zealand imported NZ$11.4 billion worth of goods and services from the U.S., resulting in a trade balance of NZ$3.5 billion and a total trade value of NZ$25.8 billion.
In addition to trade, New Zealand is part of the “Five Eyes” intelligence alliance, which includes Canada, the U.S., the U.K., Australia, and New Zealand. Willis emphasised that this strong strategic relationship adds another layer of cooperation between the two nations. While she acknowledged that tariff decisions ultimately rest with the U.S. administration, she expressed confidence that New Zealand would manage any challenges arising from tariffs if they are imposed.
Willis also pointed out that the country’s exchange rate could help buffer the impact of any tariffs. In the event of tariffs, a lower New Zealand dollar could make exports more competitive, potentially offsetting some of the economic impacts. Recently, the New Zealand dollar had weakened to its lowest point in over two years against the U.S. dollar, trading at 0.5515 to the greenback in early February.
Furthermore, Willis recognised New Zealand’s significant current account deficit but reassured that the flexibility of the exchange rate would allow for adjustments and balancing over time. This ability to respond to changing economic conditions provides New Zealand with the tools needed to navigate the challenges posed by global tariff threats. Overall, the country remains hopeful that its balanced trade relationship with the U.S. will continue to thrive, regardless of potential tariff disruptions.
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