New Zealand’s Finance Minister Nicola Willis has expressed optimism about the country’s trade relationship with the United States, even as potential global tariffs loom under the administration of U.S. President Donald Trump. Speaking on CNBC’s Squawk Box Asia, Willis emphasized the “balanced and complementary” nature of the trade ties between the two nations.
A Strong and Complementary Relationship
Willis highlighted that New Zealand’s trade relationship with the U.S. benefits both countries. The United States is a key market for New Zealand’s exports, particularly meat and wine, while New Zealand imports significant goods and services from the U.S. In fact, the United States recently overtook Australia to become New Zealand’s second-largest export market.
According to the New Zealand Ministry of Foreign Affairs and Trade, exports to the U.S. totaled NZ$14.6 billion ($8.26 billion) for the 12 months ending March 2024, while imports from the U.S. reached NZ$11.4 billion. This resulted in a trade surplus of NZ$3.5 billion for New Zealand, with the total trade value between the two countries hitting NZ$25.8 billion.
Describing the trade relationship as “one that works for both parties,” Willis also pointed out the broader strategic ties between the nations, referencing New Zealand’s membership in the “Five Eyes” intelligence alliance. This alliance, which includes the U.S., U.K., Canada, and Australia, serves as a critical foundation for strong bilateral relations.
Tariff Threats Loom, But Resilience Remains
Despite the positive outlook, potential challenges lie ahead. President Trump announced plans to impose a global tariff of 25% on steel and aluminum imports, which could add to earlier tariff threats targeting Canada and Mexico. When asked whether New Zealand might be exempt from these measures, Willis remarked that tariff decisions ultimately rest with the U.S. administration. However, she emphasized that New Zealand would address the situation if it arises.
Willis also expressed confidence in the resilience of New Zealand’s economy, noting that the New Zealand dollar could provide “buffers” against potential tariffs. A weaker currency, she explained, would make New Zealand’s exports more competitive in international markets. The kiwi recently hit its lowest point in over two years, trading at 0.5515 against the U.S. dollar as of February 3.
Addressing Economic Challenges
While acknowledging the country’s “significant current account deficit,” Willis highlighted the role of exchange rate flexibility in maintaining economic stability. She expressed confidence that the exchange rate would help balance the country’s accounts over time.
Looking Ahead
Despite the uncertainties surrounding global trade policies, New Zealand remains hopeful about its partnership with the U.S. The Finance Minister’s remarks reflect a commitment to fostering positive trade relations while navigating potential challenges. As Willis noted, New Zealand’s trade relationship with the United States is not only vital but also grounded in mutual benefit and strategic cooperation.
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