US president Donald Trump has cancelled tariffs on several US food imports including beef and kiwifruit. Photo: AFP / RNZ Composite
Growers and farmers in New Zealand are relieved the US has removed and lowered some of its tariffs on products New Zealand sells to them.
Trump has cancelled tariffs on several US food imports, including beef and kiwifruit.
Zespri chief executive Jason Te Brake told Morning Report it was a "quite positive" move for the local industry.
"We were concerned around inflationary pressure for consumers and particularly going into next year, so it's good to see some relief happening there."
He said it came as a surprise.
"We've actually been getting indications that it could go to 0 [percent] or it could go to 20. So it's sort of been, you know, just sort of seeing which way the wind blows for the course of this year and everything's been up in the air, so we've just been working on different scenarios... We started this journey back in about March, April and and it sort of seems to move back and forwards depending on which month it is."
Despite the tariffs and uncertainty, Te Brake said exports to the US were up about 30 percent this year.
"We have seen consumer demand really strong and we've been building the market for about five years now in the US on the back of our Sungold products and really strong branding. So we we continue to invest in that even though we're facing the tariff."
Prime Minister Christopher Luxon told Morning Report about 25 percent of New Zealand exports to the US were back to where they were before tariffs were announced on 2 April.
The government would continue to push for the removal of US tariffs.
"We will continue to make the case, as we have done, that Kiwi exports are balanced and complementary, plus we have basically zero tariffs on US goods into New Zealand."
Luxon also pointed to a "massive" shortfall of livestock and red meat around the world. "That's a good thing for New Zealand. Our guys have been agile and able to move between different markets."
Meat Industry Association chair Nathan Guy called it "welcome news" for farmers.
"We always thought that these tariffs could indeed be inflationary for US consumers. We know that burgers in the US are pretty much a staple - they consume per head of population about three burgers per week, and we're a big part of that because of our nutritious and very lean beef."
'Constant flip-flopping'
An economist said Trump's flip-flopping on tariffs had New Zealand businesses on edge.
Sense Partners economist John Ballingall said it was good news for a lot of businesses - but many were still finding it hard to relax.
"The [frequent] changes are making life very difficult for our businesses. When businesses are uncertain they tend not to invest or hire people, and the constant flip-flopping is certainly affecting businesses' planning," he said.
"When the global economic environment is uncertain it can be a bit risky making big investment decisions or hiring a whole bunch of people because you don't know how the market's going to change."
"Right now the US economy is very hard to predict and that makes long term planning very difficult ... They're both nervous and fully expect Trump to change his mind again."
Trade Minister Todd McClay expected export trade in beef and kiwifruit would return to previous levels, but said the frequently changing rules from the US was challenging for businesses.
"We estimate there's a tariff saving of $300 million but again it is the changing nature that is concerning some of our exporters more at the moment than the tariff rates were," he told Morning Report. Many would be renegotiating contracts over the next year and the uncertainty would make it more difficult to get the contracts locked in.
There were many others still facing the 15 percent tariff, he said. "We'll continue to make the case to the US, as we have been, that we think the tariff rate is unfair, it's unjustified."
Ballingall said Trump's latest reversal could be a sign of things to come.
"I think what we will see over the next few months is that US consumers, and therefore voters, are starting to get very frustrated with the high cost of living and that's what has driven the cancellation of these tariffs," he said.
"If inflation continues to increase in the US, which most people expect it will do, then it's entirely possible that we could see more tariffs come off."
The approaching midterms could ramp up that pressure further, he said.
"The fact that US voters are starting to become much more concerned about cost of living issues will be troubling the administration, because the midterm elections are now not that far away and they probably don't want to be going into those elections fighting a cost of living crisis," Ballingall said.
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