WELLINGTON (Reuters) – New Zealand will not revise its economic and fiscal plans despite the turmoil in the global financial markets triggered by U.S. President Donald Trump’s tariff plans, Finance Minister Nicola Willis said on Tuesday.
A global trade war touched off by Trump’s sweeping tariffs escalated further on Monday, as he threatened to increase duties on China and the European Union proposed its own counter-tariffs, wiping out trillions of dollars in stock market value.
Trump has imposed a unilateral 10% tariff on New Zealand, the low end of his reciprocal tariffs for all imports into the United States. Wellington has said it would not retaliate.
Though Trump’s trade policies posed risks, Willis said her government had taken measures to effectively navigate through a period of uncertainties in global financial markets.
“Though unwelcome, these impacts are likely to be modest in comparison with the impact for many other countries,” Willis told reporters.
“We have enough resilience to withstand it and we are in … a fortunate position relative to others that we can stick to our economic and fiscal strategy.”
Willis said the government still expects to get its books back in surplus by the end of this decade, and that she planned to include in next month’s budget the impacts of the tariffs on the country’s economic growth.
The U.S. is New Zealand’s second-largest market after China, with the Pacific nation last year shipping about 12% of its total exports to the United States, official data showed.
Some of New Zealand’s largest exports to the United States, such as dairy, meat and fruits, are among the most traded commodities across the world, giving it more leverage to diversify its export markets, Willis said.
New Zealand’s economy has been struggling in recent months and the central bank has cut rates by 175 basis points since August last year to spur the economy.
All 31 economists in a Reuters poll expect the Reserve Bank of New Zealand to cut the cash rate by 25 basis points to 3.50% at its Wednesday meeting and they see more cuts in 2025 as it reacts to U.S. tariffs and their potential economic fallout.
(Reporting by Lucy Craymer in Wellington and Renju Jose in Sydney; Editing by Tom Hogue and Lincoln Feast.)
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