Damien O'Connor: Labour's Trade Spokesperson on the impact of Trump's re-election on New Zealand trade and exports

Kiwis are being warned to prepare for a more challenging trade environment as Donald Trump returns to the White House. 

Trump has proposed a tariff of up to 20% on all imported goods, with China potentially receiving special treatment and a tariff of up to 60%.  

New Zealand exports about $8 billion worth of goods to the US every year, and tariffs could have a significant impact. 

Damien O’Connor was a Trade Minister during the Biden Administration, and told Kerre Woodham that any tariffs implemented by Trump as President, we simply have to live with.  

He says that if tariffs are slapped on in the US, then other exporters will simply shift their product to the other markets as well, so we may have to compete with them on price. 

“These tariffs will not help anyone across the globe, including the very people in the US who they think it’s designed to help.” 

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Kerry Wooden Mornings podcast from News Talk, said.

Speaker 2 (00:10):
B, what will the re election of Trump mean for
New Zealand and more specifically New Zealand exporters. Damien O'Connors,
Labour's trades spokesperson David Parker was Trade Minister under the
Trump administration. Damien was under the Biden administration, and he

(00:35):
joins me now a very good morning.

Speaker 3 (00:36):
To you, Cure Carrie Kilder.

Speaker 2 (00:40):
It looked like whoever was elected though they understood the
appeal of promoting US made US manufacturing industry, trying to
reinvigorate it, or at least saying they were trying to
do so. How hard is it going to be to
get a deal now for our exporters?

Speaker 3 (01:04):
Well, look, we are moving into a more protectionist world
across the globe, but in particular in the US. Donald
Trump pulled out of the TPP, which has been negotiated
in twenty seventeen. CPTPP progressed very valuable trade agreement. The
US is not there, you know. Since then, we have
been actually growing a significant trade volumes and value with

(01:28):
the US and it's now our second biggest market in
some areas, third and the other fourteen and a half
billion dollars worth of trade, which is significant. That's just exports.
We don't have a free trade agreement with them, so
this has occurred in the absence of a free trade agreement. Now,
while things are good, that just trucks along quite well.

(01:50):
We pay a bit of tariffs, but New Zealanders still
have profitable trade. But when something goes awry, we have
no protection whatsoever. So the US slapped on tariffs on
our aliment and steel. Other than go along and ask nicely,
there was no ability for US to legally challenge that.
That's the exposure that we have, and so any tariffs

(02:12):
that President Trump puts on we simply have to live
with them.

Speaker 2 (02:18):
Yeah. I was talking to the head of Beef and
Lamb the other day saying, look, you know, this trade
deal with the UAE has got to be good for
beef and lamb farmers because they're looking at lamb. She said, ah,
we're just looking to the election and seeing what happens
next before we start to rebuild our herds and our flocks.

Speaker 3 (02:40):
Yeah. Well, I mean the US, I think the second
biggest market for beef and for some slices of that
beef market, the biggest manufacturing beef which goes into a
lot of the mints and the burghers, and we have
this high quality, pasture fed lean beef that they love,
so very significant for us. We don't know what he

(03:02):
might do in those areas of primary experts, but you know,
indications are that he will step into protect their farmers
and their primary producers with some kind of tariff. And
you know, we may be able to trade through that,
that is, pay the tariff and still make a profit,
but that will come straight off the bottom line and

(03:25):
for the consumers in the US, that will cost them all.
That's something that I think the US voters didn't quite understand.

Speaker 2 (03:31):
Yeah, I mean, I know that the world markets are
looking to New Zealand and other other markets for food security,
as an abundance of food and also the quality of
the food, and we do have a very good marketing
around the quality of our food, which may see those

(03:51):
in the position to do so pay a bit extra.

Speaker 3 (03:55):
Look, we fill the gaps around the world. Our total
percentage of world food production is a drop in the bucket,
but we trade quite a bit of what we produce,
and so two and a half percent of total world
dairy production. But we're the single biggest trader of dairy
product that goes to fill the gaps from time to

(04:15):
time as it is needed. So we produce a reliable,
high quality product. But we're going to be able to
make a profit at those sale prices, and there's no
subsidies here, so we've got to get enough from the
market to bring back to the farmers to ensure that
they make a profit. That's where it gets quite tricky.
So any tariffs come off the bottom line that is,

(04:36):
there's less money to pay back to farmers.

Speaker 2 (04:39):
Yeah. And it's interesting, isn't it, because it's going to
be easier to recommission a decommissioned factory than it is
to persuade US farmers to build up their stock again.
But farming speaks to the identity of a country too,
you know where those countries have a strong like that's

(05:02):
why the UK, I suppose, is given its farmers protection
for so long.

Speaker 3 (05:08):
I mean those countries the US to a lesser extent,
but you know Europe and the UK, they've gone through
periods of starvation because they haven't had enough food produced.
Now the US, like New Zealand, produces a huge amount
of food. So food security is not the issue for US.
It's more around affordability. Distribution of food is not fair
and we've got to address that. We only produce enough

(05:30):
food for as I say, for about forty million people, right,
which is but we do have technologies and we work
to fill the gaps as I said before, and assist
with the food production systems. Look the US in terms
of some of its dairy production, it's more efficient than
we are. You know, they not three times a day.
They've got massive grain production that comes into the dairy,

(05:50):
so they can produce it in volume. But we've got
to aim for those high quality pasture fed markets. So,
you know, us finding the niche opportunities to get the
value returns is important. But when you look at the
US and what the results of the action might deliver,
it it will be tougher markets around the world because
if the tariffs are sleappt on in the US, then

(06:12):
other people who are exporting dairy and you know South America, Ireland,
Europe a big exported, they will simply shift their product
to the other markets as well, where we will be
competing and we may end up having to compete on price.
So these tariffs will not help anyone across the globe,
including you know, the very people in the US who
they think it's designed to help.

Speaker 2 (06:35):
How much is bluster, how much is just electioneering just
getting into office.

Speaker 3 (06:44):
We don't know. I think we'll be holding ours on that.
You know. The reality is that there was so much misinformation,
so many ridiculous statements promise, and it's hard to know
what we'll finally be sifted out from this process. Clearly,
the Republicans have got the Senate, got the House, and

(07:06):
the President, so there won't be too many handbreaks on
some policies which you know, may help Americans, or some
of them may help the world, who knows. I think
this has created a huge uncertainty across the globe, and
at this early stage it's too hard to say what
it will mean for us.

Speaker 2 (07:25):
In terms of being able to crack a market, you know,
without any help whatsoever. Fourteen billion dollars worth. That's quite
an achievement. But is it only going to those privileged
people who can afford to pay extra for equality products?

Speaker 3 (07:41):
Well, I mean in terms of the manufacturing beef, which
is a big part of the goods market. Do you
know that's going into handburgers. So I guess they see
value in going into that segment of the market. But
it's still at a price that gives us a return.
I mean, we consider it. It's at the lower end
of the value segment of beef, but it's still good

(08:04):
enough to make us plenty of money. Shift of volume.
So we've got of cold cows, we have a lot
of balls. We have a lot of animals that aren't
the premium state producers that we might expect to eat
in New Zealand, but it's still high quality protein. We
have done a great job to build up that market.
But you know the services area, that is the tourism sector,
which has had really strong growth about thirty percent in

(08:26):
the last twelve months. You know, we're exporting technology, there's
aviation research and event all those other areas that may
be impacted by tarifs as well. We simply don't know.

Speaker 2 (08:39):
We live in interesting times. Damien, Thank you very much
for your time. Damien O'Connor Labor Trade Sperksperson. He was
Trade Minister under the Biden administration.

Speaker 1 (08:48):
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