New Zealand fruit exporters have managed the first six months of United States tariffs with limited disruption, according to a report by Westpac and the International Business Forum. The review assessed the impact on New Zealand's annual US$9.3 billion export trade with the United States, the country's second-largest export market.
Westpac senior economist Darren Gibbs said the tariffs had been unhelpful but manageable for exporters. "Strong demand and high commodity prices are shielding most primary goods exporters from the negative impact of reciprocal tariffs where applicable."
Around 70 per cent of New Zealand exports to the United States were affected by 15 per cent reciprocal tariffs, applied in addition to existing quotas and tariffs. The report found that the impact varied by sector, with outcomes differing across export categories.
Within horticulture, the assessment focused on fruit exports, including kiwifruit and apples. According to Gibbs, pricing conditions have supported these categories. "The good news, for the most part, has been the continuation of high export prices, and we're still seeing very good prices for kiwifruit and apples."
He added that the United States decision to suspend tariffs on fruit in November provided further support for these products. The importance of the U.S. market also differs by crop, with some fruit categories more exposed to tariff changes than others.
The report noted that some export categories are tracking below year-earlier levels, while others are showing slower growth rates. Within fruit exports, overall performance has been supported by demand rather than affected by a drop in consumption.
Gibbs said several exporters had been able to pass tariff-related costs on to U.S. importers. "Those that have been most successful are those selling commodity products currently in high demand with few near-term substitutes and those selling high-tech and somewhat unique manufactured goods with no substitutes."
Exporters are being advised to continue diversifying markets, strengthening supply chains and U.S. commercial relationships, and developing differentiated products for U.S. consumers.
Gibbs said early concerns that tariffs could disrupt global trade have not materialized. "We're progressively seeing consensus forecasts of global growth being revised higher over the second half of the year," he said, adding that tariffs have moved down the list of global economic risks.
However, he cautioned that tariffs remain a source of uncertainty for exporters. A slowdown in U.S. economic growth or consumer spending could affect trade flows, as could the outcome of a U.S. Supreme Court case examining the legality of the tariffs. "The current set of tariffs may be ruled illegal, and if that is the case, there would be a renewed period of uncertainty because it's not clear what the White House would do in response to that."
Source: RNZ News
