Trump’s tariffs: Hawke’s Bay export leaders assess potential regional impact

• Hawke’s Bay exporters are concerned about President Trump’s 10% tariffs on US-bound imports from New Zealand.
• The chief executive of Hawke’s Bay’s Regional Economic Development Agency says the region’s export-focused economy, especially meat and wine, will be impacted.
• However, the tariffs are lower than those on other countries, potentially keeping Hawke’s Bay goods competitive in the US market.

Hawke’s Bay farmers and exporters are readying for a scrum over tariffs with the US, as President Donald Trump’s worldwide shake-up plunges them into an uncertain future.

“To give it a rugby analogy, we’re ‘crouch, touch, hold’, and we’re still holding before any engagement,” farmer director for Beef + Lamb Eastern North Island Patrick Crawshaw said today.

On Thursday, Trump announced sweeping tariffs on more than 125 countries, including 10% on imports coming from New Zealand.

In response, Prime Minister Christopher Luxon said “tariffs are not the way to go” and he expects US consumers will face higher prices for New Zealand goods.

US bank JP Morgan today raised its risk of global recession in 2025 to 60%, as world markets tumbled in the wake of Trump’s announcement.

Lucy Laitinen, chief executive of Hawke’s Bay’s Regional Economic Development Agency, said Trump’s tariffs would hit the region, given a significant proportion of the region’s economy is export-focused.

“The estimated value of exports from Hawke’s Bay in 2023 was $3.23 billion, which was around 31% of the region’s GDP,” she said.

“We do not have details about the value of Hawke’s Bay exports to the US, [but] assuming the export profile of Hawke’s Bay mirrors New Zealand’s, then around 12% of the value of the region’s exports would be directed at the US.”

Laitinen said 36% of the value from exports in the region was generated by the meat and meat processing industry.

Food and beverage processing is next at 18%, followed by horticulture and related processing including wine at 10%, and forestry and wood processing at 9%.

Materials, machinery, and equipment manufacturing and professional services are also significant exporters for the region.

“Some of our key industries are more exposed to the US than others,” Laitinen said.

“For example, nationally, around 35% of the wine industry’s exports, 34% of machinery and equipment exports, 30% of meat exports, 8% of log and wood exports and around 7% of fruit exports go to the US.

“We will see varying effects of the US by industry, depending on their reliance on the US market, the ability of US consumers to switch to domestic sources, the ability of value chains to absorb the cost increases and subsequent impact on prices in the US, and the impacts on other exporters to the US.”

Laitinen said there was a positive side for Hawke’s Bay.

“The tariffs imposed on New Zealand exporters are at the lowest end of those facing other economies, which will mean that our goods and services will remain competitive in the US against other exporting nations,” she said.

Crawshaw said the tariffs added uncertainty, but currently meat exporters were enjoying good commodity prices.

“There’s a lot of product going into the US and ... the market of fundamentals is really high [over there], they’ve got a 64-year low in their cow herd, so they’re desperate for beef,” he said.

Crawshaw says 80% of beef exported to the US goes towards the McDonald’s burger beef trade, where fatty US-raised beef and lean Kiwi beef are ground and mixed to make a good burger patty consistency.

“Those market fundamentals of demand are still very much in New Zealand farmer or NZ exporter’s favour.”

Executive officer at Hawke’s Bay Winegrowers, Brett Limm, said the tariffs were far better than what he was expecting, and the risks were within the normal range of risk that exporters experience.

“[The US is] an important export market for New Zealand but it sits in the premium category where resistance to price is perhaps not as impacted.

“I think that the changes to pricing that will come about because of this tariff are modest when you compare them with the normal fluctuations with currency over a trading time,” he said.

Napier MP Katie Nimon said while the 10% tariff would impact Hawke’s Bay exporters, “our strong global ties keep our high-quality exports in demand”.

“The Government is boosting growth and diversifying trade by upgrading deals and securing new ones, including with the UAE and India, aiming to double exports in the next decade.”

Jack Riddell is a multimedia journalist with Hawke’s Bay Today and spent the last 15 years working in radio and media in Auckland, London, Berlin, and Napier. He reports on all stories relevant to residents of the region.