New Zealand‘s trade and finance ministers have recognized the increase in the “reciprocal tariff” imposed by U.S. President Donald Trump. They have expressed a mixed view, noting that while things could have been worse, the situation also opens doors for a better resolution. Exporters sending most New Zealand goods to the United States now face a 15 percent import duty, up from the previous 10 percent rate that had been in place since April.
Finance Minister Nicola Willis shared her disappointment about the U.S. decision. She argued that New Zealand faced an unfair “very blunt formula.” This approach did not take into account the low tariffs New Zealand charges on U.S. products. Trade Minister Todd McClay supported her views, linking the tariff to New Zealand’s trade surplus with the United States. Both ministers plan to protest the decision formally to their American colleagues. Mr. McClay mentioned he would seek an “urgent call” with the U.S. Trade Representative and promised to strongly advocate for a solution that benefits New Zealand exporters.
Ms. Willis downplayed the significance of the trade surplus, explaining that New Zealand’s goods exports to the United States only “slightly exceeded” its imports. For the year ending March 2025, New Zealand reported a merchandise trade surplus of about NZ$900 million on NZ$9.3 billion of goods exports, giving a surplus of around 10 percent. Including services significantly increases the surplus to over NZ$4 billion, representing nearly NZ$17 billion in total exports. Tariffs mainly target goods, not services, but this distinction is unlikely to change President Trump’s trade policies. Recently, New Zealand’s exports to the U.S. have grown significantly, driven by strong demand for red meat. This growth led the U.S. to overtake Australia as New Zealand’s second-largest export market in 2024.
Some analysts believe New Zealand received a comparatively mild 15 percent tariff under President Trump’s approach to trade negotiations. This rate is similar to what long-standing U.S. allies like Japan, South Korea, and the European Union face. In contrast, many ASEAN members, with whom New Zealand has strong trade ties, now encounter tariffs of 19 or 20 percent, with Laos and Myanmar facing even steeper duties of 40 percent.
Despite these comparisons, Ministers Willis and McClay likely realized that framing the outcome as the best deal would not resonate with the New Zealand public. The success of Australia in keeping its 10 percent baseline tariff will likely be a point of comparison for New Zealanders, who often measure their economic performance against their larger neighbor. The timing of the tariff announcement was unfortunate for Prime Minister Christopher Luxon, Mr. McClay, and Ms. Willis, who are all members of the National Party. The news broke during their annual conference in Christchurch, intended to showcase the Luxon government’s economic management. With more than half of the parliamentary term complete and elections due by December 2026, the government is keen to show progress on economic growth and cost-of-living concerns.
In her remarks, the finance minister aimed to provide broader context, mentioning that the value of New Zealand’s exports rose by 11.4 percent in the year to June, mainly due to high food prices. This export performance contributed to stronger-than-expected GDP growth of 0.8 percent in the first quarter of 2025. New Zealand has also taken diplomatic steps to reduce potential U.S. retaliation. Last week, New Zealand’s police and defense ministers welcomed FBI Director Kash Patel to Wellington for the opening of a new office at the U.S. Embassy.
While New Zealand officials stressed cooperation on international crime and drug smuggling, Director Patel, in a video statement, highlighted “countering the CCP [Chinese Communist Party] in the Indopacom theater” as a main reason for the new office. This comment drew a strong response from the Chinese Embassy in Wellington. They expressed their strong opposition to “any attempt to make groundless assertions or vilification against China.” China remains New Zealand’s largest trading partner, accounting for over NZ$21.5 billion of goods and services exports, which exceeds 20 percent of New Zealand’s total exports for the year ending March 2025. The balance of New Zealand’s foreign policy and trade relationships is clearly under scrutiny amid these changing global dynamics.
