Mixed reactions from Bay of Plenty business to Trump win

By David Porter

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Donald Trump's win has some Bay business commentators predicting a slowdown in global trade and challenges for New Zealand exporters.

But one trader noted that stock and currency markets had already largely shaken off the surprise result. How the new President handled the transition to his new administration would determine whether global markets again got the jitters, he said.

Chamber of Commerce chief executive Stan Gregec said he thought all businesses were feeling a little bit nervous. "We all need to hear what Trump is actually going to commit to."

Mike Moore, a former World Trade Organisation director-general, who had recently returned from a lengthy stint as ambassador to Washington, told the Bay of Plenty Times the result did not surprise him.

"The workers sharpened their pitchforks and took them to town," he said. "It will mean the world will take a bit of shock for a while, there'll be less global growth.

And there are some missing items in trade and in agriculture and development aspects that will probably be pushed aside."

However, eventually the "iron reality" of economics and trade would see a pushback, Mr Moore said. He also noted that, while Hillary Clinton had believed in the Trans-Pacific Partnership agreement, she had not committed to getting it passed through the US Congress.

Michael Franks, chief executive of Te Puke-based Seeka, said the TPP was dead. "But perhaps the biggest issue is that, if Trump carries through and puts an import duty on Chinese manufactured goods, that must have a negative impact for global trade."

ExportNZ Bay of Plenty referred comment on the election result to its executive director Catherine Beard, who said the result signalled a bumpy ride for currency markets and a lost opportunity to reduce trade barriers for New Zealand products if the TPP was knocked back.

But despite Mr Trump's criticism of free trade agreements, it remained to be seen how much was merely political rhetoric. "We hope that in reality, common sense prevails and there will be a return to a more orthodox position on international affairs," she said.

Surtees Boats, a major exporter to Australia, which had been looking to move into the US market, was now reconsidering its strategy, said chairwoman Toni Palmer. "We're going to have to re-research it and that will probably delay it for 12 months while we're watching to see what the new administration's stance on trade is going to be."

However, Peter McCormick, managing director of Katikati-based Puma Dart Products, which sells to more than 70 countries, said that if Mr Trump went through with adding tariffs to Chinese goods, it could open up more opportunities in the US for New Zealand manufacturers of consumer goods.

"I don't see it as a bad election, as it could result in the US economy growing."

Nick McDonald, owner of Tauranga-based Trade With Precision, which provides training for markets traders operating around the world, said the key outcome was that there had been an uncontested result. "What the markets really wanted was certainty."

Although US and world stocks had plummeted, the next day US stocks had registered their biggest reversal since 2008, he said.

"Trump's conciliatory acceptance speech soothed a lot of people. If he starts talking about building walls we're going to see the market swing wildly. But if not, the world will go on, just like after Brexit."

The US Market

- New Zealand's third largest export market, taking $8.4 billion of goods and services in 2015.

- Bay of Plenty Times

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