Editorial: Hope for the best
New Zealand's dairy industry is right to call out Donald Trump over the damage the additional 15% tariff the US is imposing on our exports but also imposition on lower tariffs on our competitors.
The US sharemarket has “largely priced in a Clinton victory”, says the NZIER, but what impact would an upset win to Donald Trump have on our economy?
When the NZIER released its report, Trupmonomics, late last week, the pollsters gave Trump a 20-30% chance of victory. Today a Reuters/Ipsos survey gave Hillary Clinton a 90% chance of taking the White House. However, Trump has bucked expectations time after time during the run-up to election day.
If he does win today, will the shock of the unexpected result impact markets like the Brexit result in the United Kingdom did? NZIER expects the immediate impact would be seen in credit conditions, the exchange rate and the US sharemarkets. Funding costs could rise as lenders became more risk averse.
Softer US economic growth could reduce demand for New Zealand’s exports, says NZIER. And it says “no reputable economic assessment” of Trump’s economic policies has demonstrated how his ideas will generate sustained productivity growth.
“One estimate is that Trump’s trade policies alone – namely imposing 35-45% tariffs on Mexican and Chinese imports – could result in the loss of up to 4.8 million US jobs. Ouch.”
Anything that hurt the US economy would reduce demand for New Zealand exports.
“We exported $8.4 billion of goods and services there in CY2015, accounting 12% of our total export revenue.”
Key products are beef ($1.6 billion), dairy ($1b), wine ($432m), lamb ($288m) and wood ($182m).
NZIER says that from our perspective, the most concerning aspects of Trump’s proposed economic policies are his views on trade. “He has run on a platform of protectionist and mercantilist rhetoric.”
As for the chances of the US backing the Trans-Pacific Partnership, both Trump and Clinton appeared to be ruling this out during their campaigning.
According to ASB, Fonterra's plan to sell it's Anchor and Mainlands brands could inject $4.5 billion in additional spending into the economy.
New Zealand’s trade with the European Union has jumped $2 billion since a free trade deal entered into force in May last year.
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.
Dignitaries from all walks of life – the governor general, politicians past and present, Maoridom- including the Maori Queen, church leaders, the primary sector and family and friends packed Our Lady of Kapiti’s Catholic church in Paraparaumu on Thursday October 23 to pay tribute to former prime Minister, Jim Bolger who died last week.
Agriculture and Forestry Minister, Todd McClay is encouraging farmers, growers, and foresters not to take unnecessary risks, asking that they heed weather warnings today.
With nearly two million underutilised dairy calves born annually and the beef price outlook strong, New Zealand’s opportunity to build a scalable dairy-beef system is now.

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