NZ wine industry dealt $112m Trump tariff blow

The New Zealand wine industry is facing hundreds of millions of dollars in extra tariffs, in a blow for the sector.

US President Donald Trump last week imposed 15% tariffs on exports from New Zealand, up from the previously advised 10%.

The US is New Zealand’s largest wine export market, worth about $750 million a year.

NZ Winegrowers advocacy general manager Sarah Wilson told Herald NOW’s Ryan Bridge the tariff announcement was “very concerning”.

“We believe it will have a significant impact on our wine growers,” Wilson said.

“Your typical bottle of New Zealand wine six months ago, that tariff was about 10 cents and now we’re looking at more like $1.10.

“That’s $112m in extra tariffs that’s got to come from somewhere.”

Wilson said it would be a decision for each business as to how those tariffs would be absorbed.

“What I can say is the bigger the tariff the more difficult it’s going to be to absorb those costs.”

She said New Zealand was at a disadvantage from a tariff perspective as some of its competitors in the wine sector, including Australia, Chile and Argentina, faced lesser tariffs of 10%.

“What we’ve seen with these [tariff] announcements is that a lot of those countries are at different tariff rates from us… it’s that differentiation that’s a real concern.

“We’re still well placed because we have a strong reputation for the wine that we produce in New Zealand. We’re known for producing distinctive wines, sustainable wines – that hasn’t changed, but certainly from a tariff perspective it puts us at a disadvantage.”

Wilson said it was difficult to say if the tariff hike would affect export volumes to the US.

“We’ll certainly be keeping a watch out for that, but certainly we hope that the existing reputation that we’ve got will put us in good stead.”

NZ Winegrowers advocacy general manager Sarah Wilson.

The US was the second-largest export destination for New Zealand goods last year, with a total value of $9 billion, according to Stats NZ.

Trade expert Stephen Jacobi told the Herald last week the tariff was unjustified at 10%.

“And it’s now even more unjustified,” he said.

“We impose very few tariffs on the United States.”

He said the impact of the tariffs on New Zealand exports would depend on the individual sector.

New Zealand International Business Forum (NZIBF) executive director Felicity Roxburgh said the US tariff move would cause real pain for New Zealand exporters.

“What people have been talking about a lot is the competitive disadvantage relative to other partners...”

She said importers typically pay tariffs through customs agents when they pick up goods.

“But basically, people have contracts and that tariff is sometimes shared, sometimes passed back to the exporter, and sometimes the importer will absorb it and pass it on to the consumer.”