New Zealand’s right-wing coalition government has
publicly sought to downplay the tariffs imposed on the
country by US President Donald Trump, despite warnings by
business commentators that they will have a major impact on
the local economy.
Trump’s announcement of tariffs
of between 10 and 50 percent being added to all imports into
the United States has sent shockwaves through the global
economy. It is a major escalation in the US trade war,
particularly against China but also Europe and other
competitors.
American imperialism is seeking to
reshore manufacturing in the US and establish “economic
independence” in preparation for world war, which it sees
as the only way to preserve its global dominance. As was the
case with the tariffs imposed during the 1930s, Trump’s
tariffs will sharply accelerate the attacks on workers’
living standards in every country, as well as geopolitical
tensions and conflicts.
All US imports from New
Zealand will face a 10 percent tariff, the same figure
imposed on goods from neighbouring Australia. While the US
calls its tariffs “reciprocal,” New Zealand tariffs on
goods imported from the US are only about 1.9
percent.
The claim by Washington that New Zealand has
a 20 percent tariff on imports from the US is false. The
figure is related to the US trade deficit with New Zealand.
As Radio NZ explained, New Zealand “makes more money by
selling things to the US than the US does selling things to
New Zealand by about 20 percent.”
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Foreign Minister
Winston Peters, from the right-wing nationalist NZ First
Party, put a positive spin on the tariffs, telling a media
conference on April 3 that the 10 percent figure was “a
brilliant outcome… there’s no country in the world
that’s done better than us.” He said it was “a day of
celebration.”
He said claims that New Zealand has a
20 percent tariff on US goods were incorrect, but dismissed
the issue as unimportant.
Peters said that his visit
to Washington last month, where he held talks with the Trump
administration on strengthening the military and strategic
alliance with the US, had put New Zealand in a strong
position. He posted on X: “The purpose of our mission has
been achieved. Indeed, New Zealand companies, who were
fearing much worse, are well positioned compared to
exporters from other countries.”
National Party
Prime Minister Christopher Luxon was less upbeat, telling
the media that the tariffs were unjustified. He said the
measures would lead to “huge uncertainty in the world, it
creates high inflation, it has currency impacts, it has
growth impacts…” Luxon said New Zealand would not
retaliate with its own tariffs.
The US was New
Zealand’s second-biggest export market last year, with an
annual value of $NZ9 billion. According to media company
Stuff, this could mean $900 million in tariffs added to
goods entering the US, which include wine, meat and dairy
products, driving up prices for American consumers. Added to
existing tariffs, the total US tariff on dairy—NZ’s
largest export industry—would increase to 30
percent.
Economist Jeffrey Halley told RNZ the cost of
borrowing in New Zealand could increase if US banks hike
interest rates in response to inflation, because New Zealand
banks obtain much of their funding in international markets
with US dollars.
Another economist, John Ballingall,
said that while New Zealand faced lower tariffs than other
countries, “for the global economy—which determines the
overall demand for our exports—the outcome is much, much
worse than I expected.
“If these tariffs stay in
place for any protracted period, it is undoubtedly a risk
the global market could slow quite markedly and that could
have a dampening effect on what we export to all markets.”
J.P. Morgan estimates that there is a 60 percent chance of a
global recession.
New Zealand’s largest export
market, by far, is China, which took about $NZ18 billion
worth of goods last year. If the US tariffs on China, which
now total more than 54 percent, trigger a significant
slowdown, demand for New Zealand exports could be severely
affected.
Retaliatory tariffs on US goods imported by
China and European countries will accelerate the spiral into
trade war and worldwide inflation.
The New Zealand
ruling elite will ensure that the financial burden of the
trade war is borne entirely by working
people.
The country’s economy is already
extremely fragile. The country experienced a recession last
year, only returning to growth of 0.7 percent in the first
quarter of 2025. The recession was deliberately triggered by
the Reserve Bank, which raised interest rates in 2023 in
order to drive up unemployment and increase the rate of
exploitation of the working class.
The
government is implementing brutal austerity measures. It is
sacking thousands of public sector workers and cutting
healthcare services, while diverting billions of dollars to
the military for war preparations. Poverty is increasing,
with about 500,000 people, one in 10, relying on food
parcels from charities to survive.
There are tactical
differences in the political establishment over how to
respond to Trump’s actions. While Peters (who is seeking
to emulate Trump’s far-right demagogy) called for a
“celebration” of the tariffs announcement, the
opposition Labour Party foreign affairs spokesperson David
Parker told TVNZ that it was part of the “unwinding of the
rules-based order.” He said New Zealand should strengthen
trade agreements with Europe and Asia, including through the
Comprehensive and Progressive Agreement for Trans-Pacific
Partnership (CPTPP).
Parker said “there has been an
erosion” of trust for the US, with “serious”
implications for the Pacific region. He said the prospect of
New Zealand joining the AUKUS military pact—an anti-China
agreement between the US, Australia and UK—“has got to
be dead in the water.”
He stressed, however, that
New Zealand is “not non-aligned” and that Labour would
maintain the alliance with the US, as well as Australia.
Parker’s main point was that New Zealand must spend more
on its own military, including by purchasing drones, and
push back against China’s economic activity in the
Pacific. He claimed that if China continued to expand its
fishing activities in the Pacific, it “could morph over
time into a paramilitary fishing fleet.”
All the
capitalist parties agree on the need to prepare for war as
part of the US-led imperialist bloc. This is the ultimate
logic of trade war.
Tariffs and other
trade barriers are economically irrational in a world where
production is globalised: there is no such thing as a purely
“American” smartphone, computer or vehicle. These and
countless other commodities are produced by workers in
multiple countries.
Tariffs express the
madness of the capitalist system, in which the world remains
divided into rival nation states and imperialist powers,
which are determined to strengthen their grip on natural
resources and supply chains at the expense of their
rivals.
To stop the descent into barbarism and world
war, as the World Socialist Web Site explained, “The
working class must undertake a political struggle for its
own independent interests. Workers in the US and around the
world [including in New Zealand] must start that fight by
opposing all forms of nationalism. Tying themselves in any
way to their ‘own’ national ruling class, in whatever
side of the tariff war they are on, is, as history has
shown, the road to disaster.”
Workers and youth must
fight for the international unity of the working class to
put an end to capitalism, which is leading the world to
catastrophe, and reorganise the world on socialist
lines.
