But this country has “agency,” and it would be absurd to stand
by publicly while Trump decimates the global trading system.
It is not in our national character — particularly when it comes to trade.
Not only when it comes to New Zealand’s sustained leadership at the World Trade Organisation (WTO) where successive officials and trade ministers, including incumbent Todd McClay, have played prominent roles.
But also in devising a great deal of the trade architecture which serves the Asia-Pacific region so well.
The direction of Trump’s swingeing tariffs — imposed under the US International Emergency Economic Powers Act — is meant to address domestic security and economic concerns as a result of persistent international goods deficits.
But friend and foe alike have been hammered.
Exporters from New Zealand (a friend) have been hit with the baseline 10% tariff on their products.
It is absurd to claim this as a diplomatic victory given the 2025 report on foreign trade barriers from the Office of the United States Trade Representative says this country’s most-favoured nation applied tariff rate was 1.9% in 2023 (1.4% for agricultural products and 2% for non-agricultural products, which is the latest published data).
The Government’s response has so far been measured.
Prime Minister Christopher Luxon stressed on Thursday that no country would benefit from Trump’s measures: “Tariffs and a trade war is not good for global economics … We don’t think that’s good for New Zealand, but frankly, it’s not good for the world. And that’s why we’ll continue to advocate against tariffs”.
Cabinet will talk about this on Monday.
That’s where the soothing rhetoric should stop and actions step up.
Successive New Zealand Governments have diversified market opportunities for our exporters through multiple new trade agreements.
But what is now needed is concerted action with other like-minded nations to put international cooperation to the fore and forge commonality where Trump forges division.
Already, Canadian Prime Minister Mark Carney has posited such a leadership role for Canada. Leave aside for now the justified Kiwi snark over Canada’s own persistent dairy protections, which hammer our exporters. Carney is stressing the need to build a coalition that shares Canada’s values.
New Zealand is, however, a far better candidate when it comes to leadership stripes.
Across the Tasman, veteran business columnist Robert Gottliebsen is advocating a much more forward leaning strategy.
Australia is in election mode, and both Prime Minister Anthony Albanese and Liberal leader Peter Dutton have been vigorous in their criticism of the US administration.
Writing in The Australian, Gottliebsen recounted a recent conversation with former Australian Trade Minister Andrew Robb, who forged many of Australia’s modern free trade agreements.
The columnist contends US Secretary of State Marco Rubio has made it clear to Australia that the issue of tariffs, which was a central part of the President’s election policy manifesto, is quite separate from defence considerations.
The upshot is that Australia should vigorously pursue its own regional trade objectives irrespective of defence priorities.
In discussion with Robb, the latter put forward a strategy. The former trade minister said Australia should “shine a huge light” on Australia’s fundamental opposition to returning to “a closed world of elite narcissism where the large and the strong do what they will, and the small and weak suffer what they must”.
“We could and should make an unequivocal statement of where we stand by initiating a bold free-trade initiative to combine the TPP (Trans Pacific Partnership) and the RCEP (Regional Comprehensive Economic Partnership) free trade agreements to create one truly Asia/Pacific free-trade zone,” Robb told The Australian.
Australia, Brunei, Japan, Malaysia, New Zealand, Singapore and Vietnam are in both of the existing agreements. Cambodia, China, Indonesia, South Korea, Laos, Myanmar, the Philippines and Thailand are only in the RCEP, while Canada, Chile, Mexico, Peru and the UK are only signatories to what is now the CPTPP.
There is merit to this proposal.
The CPTPP members have been reluctant to let China through the door.
There is strong opposition to China from the UK in particular, but also Canada.
But Trump’s actions have forced a re-reckoning. Old foes are considering where they can unite to mutual advantage.
China is now seeking to coordinate its response to US tariffs with Japan and South Korea, as the world’s second-largest economy looks to bolster regional economic collaboration.
Reports suggest there has been no decision yet by Korea and Japan to coordinate action with Beijing, but the countries are having three-way talks and hope to conduct speedy negotiations toward a trilateral free-trade agreement.
It is a dangerous time.
The global economy is already being seriously impacted.
US markets marked their steepest decline yesterday since 2020, as investors took on board that tariffs will hurt economic growth and corporate profit and trigger global retaliation.
The WTO is also predicting a significant “downward revision” to global trade projections.
On Monday, Cabinet will discuss the valuable work that officials are doing to support our exporters.
Playing a renewed leadership role in preserving and developing the global trade architecture should be right up there.
Time for the mouse to roar.
