Listen: What a trade war could mean for NZ farmers

New Zealand Special Trade Envoy Mike Petersen. Photo / Duncan Brown

An escalating tit-for-tat trade war between China and the United States has fueled fears it might set back the global recovery if other governments are prompted to raise their own import barriers.

New Zealand Special Trade Envoy Mike Petersen spoke to The Country's Jamie Mackay about the trade war and what it could mean for New Zealand's primary industries.

Not good news. First US imposes tariffs on steel and aluminum. China retaliates with 25% tariffs on $3bn of US products to China. US steps up with further 25% tariffs on 1333 imported products worth $50bn from China. This is what a trade war looks like folks. https://t.co/ZwpgaTt5ma

— Mike Petersen (@tepunamike) April 4, 2018

"The concern for New Zealand has always been if it spreads into products of interest to us, particularly from our primary sector."

Petersen says that for the first time beef is on the list of products with increased tariffs which is concerning for Kiwi farmers producing beef for export.

"If there is any disruption to the beef trade between the US and China, then that beef has to go somewhere else, it'll either end up on the domestic market in the US which will mean a surplus of beef that could drive down prices - or the US could divert that beef into markets where we're currently enjoying very good returns."

Soy was included in the first round of tariffs which could cause issues for New Zealand says Petersen.

A reduction in soy exported to China could result in a global surplus of cheap feed and this would be hard for New Zealand's grass-fed products to compete with.

"Cheap feed, I always say, is the enemy of New Zealand grass-fed production."

Also in today's interview - Mike Petersen takes a look at how the trade war is affecting global financial markets and President Donald Trump's effect on the World Trade Organisation.

Listen below: