Trade and investment minister Todd McClay. Photo: RNZ / REECE BAKER
Potential tariffs on New Zealand agricultural exports to the United States are concerning, the trade and investment minister says, but he is confident NZ's trade is resilient and diverse enough to weather the worst.
US president Donald Trump has signalled the US will impose tariffs on "external" agricultural products from 2 April.
Todd McClay says New Zealand is "not sitting back waiting to see," and the embassy in Washington DC was gathering as much information as it could and making the case to the US that New Zealand's trade is well-balanced.
"We buy and sell similar amounts to each other, it's complementary. Predominantly, New Zealand exporters to the US face higher tariff rates than US exporters do to New Zealand, because we have a very low tariff regime, so we want to make sure they're reminded of that," McClay told RNZ.
There were also plans to secure a phone call between himself and the United States' Secretary of Commerce Howard Lutnick in the next week or so.
"Just to introduce ourselves, and talk about how the two-way trade works very well. There are a number of American exporters and investors that do very well in our market here, because we're a low tariff regime, and we respect the rules. Our officials are making the case, we will be at a political level also."
Speaking to Morning Report on Thursday, McClay refused to rule out introducing retaliatory tariffs on US imports, but said they were taking advice on everything.
"I think the easier way to put it so we don't get a great big headline is we're not ruling it in at this stage but we're getting advice on everything available to us," he told the programme.
The US is New Zealand's second largest trading partner, despite New Zealand not having a free trade agreement with it.
A StatsNZ report in January said a total value of $9b made its way Stateside in 2024. The US had also overtaken China as New Zealand's primary destination for meat exports.
In 2024, meat exports were worth $2.6b, with $1.8b of that made up of chilled and frozen beef. Sheep meat was valued at $626m.
The US also received $883m worth of milk powder, butter, and cheese, as well as $338m of casein exports.
Wine was also highly valued, worth $702m.
McClay, who is also the agriculture minister, said a lot of the beef and beef fat that does go into the US market was mixed with US beef to go to hamburger chains, and if prices went up due to tariffs, or if it was not exported at all, it would mean hamburgers would become more expensive in the United States, as it does not produce enough to meet the demand.
He said while the US was an important market, the New Zealand government was taking a cautious approach.
"We don't know yet whether it is country specific, product specific, that the president of the US is talking about having tariffs on. But either way, any tariffs are put in place and we get escalation and fighting between nations, isn't good news for a trading nation like New Zealand."
McClay said when the UK joined the European Community, New Zealand's trade exports had dried up "almost overnight" because of its reliance on the UK market. Subsequent governments had ensured New Zealand would not be in such a position again, and had since diversified New Zealand's trade interests.
"A tariff on New Zealand exports, along with everybody else's exports into the US, is not a good thing for New Zealand. But we are resilient, and ultimately there will be opportunities in other markets should the worst happen and our beef exports to the US start to diminish," he said.
"As an example, Canada and China have said they're putting tariffs in place against the US. They import a lot of beef from around the world, including America. If that tariff rate means that American beef is more expensive, and therefore maybe not exported to China, their restaurants will still want high-quality beef, the supermarket shelves will still need it. They're likely to pivot and look towards New Zealand, where we do have a trade agreement, and they know the quality of our product is the same, if not superior to the US."
New Zealand had also secured free trade agreements with a "network" of other nations and blocs, and exporters would be as engaged with those markets as much as the US.
"There's still opportunities for New Zealand exporters. However, if there are tariffs in the US, it is going to hit the bottom line, and take a bit of shine off what has been a very, very good year for our dairy and meat exporters," he said.
McClay said officials were going line-by-line through tariff rates to see where New Zealand's were higher than the United States.' He indicated there were a "small number" of instances where New Zealand's were higher.
He had also spoken to trade ministers from around the world to see what they were doing, and there was a common need to reinforce the rules' based approach to trade and find ways to work closer together with each other, irrespective of what the US was doing.
Labour's trade spokesperson Damien O'Connor said New Zealand should be "very concerned" about Trump's tariff plans.
"We're a trading nation, we rely entirely on our ability to export. His interventions across the globe, with tariffs, with threats, mean that there will be disruption, and we will be affected by that in a large or small way, we don't quite know yet," he said.
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