New Zealand says economic recovery made harder by US tariffs

[WELLINGTON] New Zealand said its recovery from recession has been made more difficult by US President Donald Trump’s sweeping tariffs as they are likely to damp global demand for its goods.

Finance Minister Nicola Willis said while New Zealand has been hit with a 10 per cent tariff on its exports to the US, the main risk is that its other trading partners, some of whom face higher tariffs, are adversely affected.

“Should retaliatory tariffs be imposed and the situation escalate, there will be further impacts on growth in these countries and potentially therefore demand for New Zealand’s products,” Willis told reporters on Tuesday (Apr 8) in Wellington. “Put simply, the past week’s global developments make our recovery harder.”

China has already announced retaliatory tariffs on US imports, exacerbating volatility on world financial markets. New Zealand’s currency, stock and bond markets have all been impacted by the turmoil. Its central bank is expected to cut interest rates on Wednesday.

Willis said the government will stick to its fiscal strategy in the upcoming budget, due on May 22, even though revenue may be impacted by the worsening economic outlook, and it still aims to return the books to surplus in the 2027 to 2028 fiscal year.

“It is clear we are witnessing a historically significant global economic event,” she said. “While there are risks to our economy, there are also reasons to feel confident that we have the right settings and policies in place to get through this period of uncertainty.” BLOOMBERG