Italy got the same deal as us, 15%. The Italian Institute of International Political Studies dug into the numbers and found that the country’s agricultural, pharmaceutical, and automotive sectors are likely to be hit the hardest, with the country’s GDP projected to dip by 0.2%.
On the other hand, the likes of Australia and the UK have secured a 10% tariff.
So, how will the duties actually affect Kiwi businesses? Or is it really American consumers who’ll pay the price?
University of Auckland Emeritus Professor of Law Jane Kelsey told The Front Page it’s hard to know the impact.
“It’s very hard to be specific about what the consequences would be, and when people put figures on that, you should be quite skeptical.
“Tariffs are kind of blunt instruments, so it will mean that exports from New Zealand imports into the US will have a higher cost for importers in the US and consumers in the US. That could affect how much New Zealand goods they buy,” she said.
She said New Zealand has a “pretty basic export commodity model” and suggests that recent events should serve as a “wake-up call to start thinking differently” about the diversification of our domestic market.
“There are real opportunities here, and we seem to have an aversion to taking those opportunities.
“It’s not simply about diversifying to other markets, but it’s also about rethinking our domestic economic model, which is currently based largely on the housing market and secondly on relatively low-value-added exports to a relatively small number of countries.
“But, we have a great difficulty generating that discussion here. There was a Productivity Commission report several years ago, before it was disbanded, that set out a process for diversification, which would thicken our domestic production, and that, unfortunately, seems to have fallen on deaf ears,” she said.
Listen to the full episode to hear more about:
- Why the World Trade Organisation is “in chaos”;
- The erosion of the rules-based trading system over successive US governments;
- And why it might be a mistake to view Trump’s tariffs as purely economic.
The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016.
You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts.
