What is a tariff?
In simple terms, a tariff is a tax imposed on goods or services imported into a country. It’s like a fee you pay when bringing something in from another country. Tariffs are often used to make imported goods more expensive than domestically produced ones, which can help protect local businesses and industries.
How it affects New Zealand?
The new US tariffs will make things harder for New Zealand, but not too bad overall. In 2024, New Zealand sold about $9 billion worth of goods to the US. If the US adds a 10% tax on our goods, it could cost us around $900 million a year – that’s only a small part (0.2%) of all the money New Zealand makes in a year.
But not all businesses will be affected the same. The meat industry, especially beef, could feel it the most since we sold $2.6 billion worth of meat to the US in 2024 – that’s about 30% of all our meat exports. The wine industry is also at risk, with 35% of our wine exports going to the US.
So while the overall damage might not be huge, some industries will feel it more than others.
What might happen?
New Zealand exporters might try to raise their prices or use smart pricing strategies to avoid losing money from the new US tariffs. At the same time, the New Zealand dollar has become weaker, which makes our goods cheaper for people in other countries to buy. That helps cancel out some of the extra costs caused by the tariffs. If selling to the US gets too expensive, New Zealand businesses may decide to sell their products to other countries instead.
The bigger picture – it’s not just New Zealand
While the direct cost of the tariffs might be small, the bigger worry is how tariffs affect the global economy. When tariffs go up, things become more expensive for people to buy, and businesses may grow more slowly. This creates uncertainty, making both people and companies more nervous about spending or investing. Prices of things countries sell, like food and metals, can drop too. Some countries, like China, are facing even larger tariffs than New Zealand (140% at time of writing!), and they are responding with their own tariffs against the US, which could make the situation worse for everyone.
What could help
To deal with this, governments around the world might step in to help by spending more money or lowering interest rates to keep their economies strong. In New Zealand, the Reserve Bank may choose to cut interest rates a little to help support jobs and growth. In the weeks ahead, it will be important to see how other countries respond to the US tariffs. People will also be watching what happens to currency exchange rates and the prices of goods. One key thing to look for is whether people and businesses slow down their spending and investing. If that happens, it could affect the economy more than the tariffs themselves.
What does this mean for my insurance premiums?
Good news! Most insurance companies in New Zealand don’t use US-based insurers, so the new tariffs won’t cause big changes in your premiums.
But some policies (like car policies) might use US-made parts or products when they fix or replace things. If those parts get more expensive because of tariffs, insurance companies might slightly raise premiums to cover the extra cost.
In simple terms most people won’t notice a change.
JenBro Insurance 16 April 2025.
