US tariffs hit European ag machinery markets
The climate of uncertainty and market fragmentation that currently characterises the global economy suggests that many of the European agricultural machinery manufacturers will be looking for new markets.
As the threat of tit-for-tat tariffs between the US and China intensifies, New Zealand exporters watch nervously.
If the trade war were to trigger a recession in China, that would mean less buying power for Chinese consumers who love our milk, meat and fruit. And if the recession spreads to the EU and the Middle East, our other key markets, and reduced our export returns, that would present a major economic challenge to our country. This threat comes on top of the extra 10% tariffs slapped on NZ exports to the US.
How things play out remains to be seen. The only thing the NZ Government can do right now is to make their case to the US administration on why the 10% additional tariffs on goods imported from NZ should go. It's clear that President Trump is placing every country that exports to the US on notice - he wants a balance in trade.
For the dairy sector, the 10% tariffs are disappointing as the US already had far higher tariffs on dairy products it imported compared to the tariffs New Zealand charges.
For NZ dairy exporters, navigating a quite challenging global dairy trade environment is nothing new. For now, the dairy sector, like others, can wait and see how the tariffs saga plays out. Like other countries, NZ also points out that the US is a close and valued trading partner. Both countries have been closely aligned for decades in support for better global trade rules. A comprehensive free trade agreement has been on the table to eliminate the few remaining trade barriers between the two countries.
However, President Trump is no one's friend when it comes to trade.
Next month when Trade and Agriculture Minister Todd McClay meets his US counterpart, he'll be putting NZ's case, arguing that trade between the two countries is balanced and the additional tariffs aren't necessary. Let's hope McClay succeeds where many global politicians have failed.
