April 9, 2025 • 7 mins
Donald Trump says the changes to his tariff policy show he's flexible.
He's put a 90-day pause on additional tariffs and lowered tariffs on all countries to 10% – except China.
Instead, Trump hiked China's rate from 104% to 125%.
He's thanked Americans for bearing with him and promised better days are coming.
Finance Minister Nicola Willis told Mike Hosking things are uncertain, but their view is that we need to stay the course.
She says they can’t controll what happens elsewhere in the world, but they can control what they do here at home.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Let's return to the world of uncertainty. We're currently swimming
in the ocr got a twenty five point trim. Of course,
the headline is we wander into uncharted territory. So is
there another twenty five next month or fifty? Where's neutral?
All that sort of thing navigating this for us all
in a sense, as Finance Minister Nikola willis, who is
with us A very good morning.
Speaker 2 (00:17):
Good morning, Marie.
Speaker 1 (00:18):
I was watching Trump's speech yesterday to some party faithfully said,
everyone's ringing up kissing his ours? Are we one of
the people kissing his ass? Currently?
Speaker 2 (00:27):
Well, Look, our diplomats in Washington have certainly been speaking
with the US counterparts. I suppose in many ways we're
fortunate because our tariff rate is lower than that faced
by some other countries. Of course, we'd prefer it to
be zero, so we'll keep pushing for that.
Speaker 1 (00:41):
When you talk or they talk to the administration, and
given what's happened in the last two or three hours,
do they come back to you with any level of
clarity that makes sense?
Speaker 2 (00:52):
Look, uncertainty is the big scene because sometimes it's clear
that the administration is making announce months and then the
US system is also in real time working to understand
that information and convey it accurately to officials on the ground.
So this is a situation where we need to keep
the phones working. People need to be continuing to seek
(01:15):
out information, monitoring developments very closely.
Speaker 1 (01:18):
How come Charmers felt the need to Australia call an
emergency meeting yesterday that involved the Treasury in the RB
and you felt the need to present a day four
piece of paper that you read out on Tuesday is
why are you misreading the seriousness of this?
Speaker 2 (01:33):
Well, I won't speak for Charmers. I did speak to
the temporary Reserve Bank governor yesterday and we shared our
observations of what's happening with the global economy. That's completely appropriate.
I'm continuing to be briefed regularly by Treasury. This is
a significant global economic event and as the Finance Minister
(01:53):
I need to keep on top of what's happening implications
for New Zealand. Our responses required the right thing, and
so far very much our view is we should stay
the course with the approach that we have been taking
to our economy, a sensible fiscal strategy, strong economic management,
continuing to make reforms which support economic growth, business certainty
(02:15):
and investment.
Speaker 1 (02:16):
How do you have certainty in a world this morning
where we're at one hundred and twenty five in counting
with China, China being our biggest trading partner.
Speaker 2 (02:23):
Well, we cannot control what happens elsewhere in the world.
What we can control is what we do here at home.
And that's why there's even more of a premium on
macroeconomic stability and sensible policies. You know, I've watched labor
have already hit the alarm, the panic button, saying, look,
this is the time to surge the borrowing, surge the
(02:45):
debt and of course in turn surge the tax. Well,
that would be completely the wrong approach, that would alarm markets,
that would create more instability. This is a time to
be steady and have a tarme hand on the tiller.
Speaker 1 (02:57):
The EU overnight retaliatory. I don't know what has happens
post the pause, but do you worry that it's all
on among hundreds of millions of consumers all over the
world in the trade wark.
Speaker 2 (03:08):
I do not like seeing retaliatory action and tips attached,
because that sort of escalation harms everyone. What we would
like of course, is stability and calm so our exporters
can work out they can get the best prices for
their products. And when the tower situation is changing as
regularly as it is, it's very difficult for our exporters
(03:29):
to work out what's best for their business, and that
uncertainty in and of itself can be quite paralyzing. So,
of course we would like to see calm in the
global situation and an end to retaliatory actions, given.
Speaker 1 (03:41):
Our success so far or lately in America wine red
meat in particular, as somebody like hawksby able to give
you any sort of specific number around the hit to
your bottom line.
Speaker 2 (03:55):
Not at the stage, because the hit to our bottom
line will be affected, ironically, not by the ten percent tariffs,
but by the impact of a slow down in global growth.
And just how dramatic that slowdown is yet to be
seen and depends a bit on whether Trump is going
to be pausing tariffs for longer, what the retaliator reaction is.
(04:15):
What we do know is we're expecting lower growth among
our trading partners, particularly here in the Asian region. We're
forecasting they will grow by at least half a percent
less than we had thought. We are looking as inflation
effects that are still unpredictable, So all of that gets
factored into our forecasts and it's just too soon to tell.
I know that it's not a satisfying answer, but you'll
(04:38):
find that that's the response economists throughout this having.
Speaker 1 (04:40):
I mean, no one knows. I mean no one blames
you for this, because literally no one knows. Is it
fair to suggest you needed this like a hole in
the head.
Speaker 2 (04:47):
Ah? Look, New Zealand was gathering momentum in our economic recovery.
We were turning a corner strongly, and now we are
facing into a real headwind. However, we remain much better
positioned than many many countries throughout the world. I back
our exporters. They are wily. We are helping them access markets.
If anyone in the world can do okay out of this,
(05:09):
it's New Zealand.
Speaker 1 (05:10):
Okay. I know you're not going to help me out much,
but help me out a little bit. Given what you've
just told us, and the budget coming next month, where's
the nine billion dollars for guns and weapons and drones
coming from?
Speaker 2 (05:23):
That is coming from a combination of the capital allowances
and operating allowances that the government has set aside for
future budgets. We won't deliver all of that funding in
one budget. We will deliver it over successive budgets. And
what you will say to remember is it's not just
about the new money we've set aside and allowances, it's
our ability to reprioritize. In last year's budget, we found
(05:44):
twenty three billion dollars on savings that we directed to
better use elsewhere, including tax relief and investments and education
and health. So where you will combine our operating allowances
with our ongoing reprioritization program, and that will support investment
not only in defense, but of course the additional funding
that the health system, the education system need, the other
(06:06):
pressing priorities for government.
Speaker 1 (06:08):
So no new borrowing.
Speaker 2 (06:11):
Well wow, I'll tell you why there's a pause, Mike,
because right now the country is in deficit. So by
definition we are borrowing.
Speaker 1 (06:21):
Well, of course that I am new borrowing.
Speaker 2 (06:25):
No, No, We're going to stick to the allowances that
we have usage operating allowance and the indications that we've
made there. I view those as a ceiling. I don't
want to exceed those. I'm very conscious of new Zealand's
net debt position, which has climbed dramatically and more than
doubled under labor when up one hundred billion dollars don't
have very much to show for that, and so we
(06:46):
need to be prudent and careful so that New Zealand
is well placed. When global storms such as the one
happening right now come along, does.
Speaker 1 (06:54):
It push out our return to surplus annually?
Speaker 2 (06:58):
No, because, as I say, we're sticking to our fiscal strategy.
The thing that we have decided to do a slick
to our intention, which is to manage to hold in
such a way that we get back to surplus in
twenty seven twenty eight. Of course, I don't control the forecast.
Will will the events have an impact on that track?
Speaker 1 (07:15):
Say well, appreciate your time as always, Finance Minister Nikoloulis.
I think we've got a good insight there. For more
from the Mic Asking Breakfast, listen live to news talks
that'd be from six am weekdays, or follow the podcast
on iHeartRadio.
Let's return to the world of uncertainty. We're currently swimming
in the ocr got a twenty five point trim. Of course,
the headline is we wander into uncharted territory. So is
there another twenty five next month or fifty? Where's neutral?
All that sort of thing navigating this for us all
in a sense, as Finance Minister Nikola willis, who is
with us A very good morning.
Speaker 2 (00:17):
Good morning, Marie.
Speaker 1 (00:18):
I was watching Trump's speech yesterday to some party faithfully said,
everyone's ringing up kissing his ours? Are we one of
the people kissing his ass? Currently?
Speaker 2 (00:27):
Well, Look, our diplomats in Washington have certainly been speaking
with the US counterparts. I suppose in many ways we're
fortunate because our tariff rate is lower than that faced
by some other countries. Of course, we'd prefer it to
be zero, so we'll keep pushing for that.
Speaker 1 (00:41):
When you talk or they talk to the administration, and
given what's happened in the last two or three hours,
do they come back to you with any level of
clarity that makes sense?
Speaker 2 (00:52):
Look, uncertainty is the big scene because sometimes it's clear
that the administration is making announce months and then the
US system is also in real time working to understand
that information and convey it accurately to officials on the ground.
So this is a situation where we need to keep
the phones working. People need to be continuing to seek
(01:15):
out information, monitoring developments very closely.
Speaker 1 (01:18):
How come Charmers felt the need to Australia call an
emergency meeting yesterday that involved the Treasury in the RB
and you felt the need to present a day four
piece of paper that you read out on Tuesday is
why are you misreading the seriousness of this?
Speaker 2 (01:33):
Well, I won't speak for Charmers. I did speak to
the temporary Reserve Bank governor yesterday and we shared our
observations of what's happening with the global economy. That's completely appropriate.
I'm continuing to be briefed regularly by Treasury. This is
a significant global economic event and as the Finance Minister
(01:53):
I need to keep on top of what's happening implications
for New Zealand. Our responses required the right thing, and
so far very much our view is we should stay
the course with the approach that we have been taking
to our economy, a sensible fiscal strategy, strong economic management,
continuing to make reforms which support economic growth, business certainty
(02:15):
and investment.
Speaker 1 (02:16):
How do you have certainty in a world this morning
where we're at one hundred and twenty five in counting
with China, China being our biggest trading partner.
Speaker 2 (02:23):
Well, we cannot control what happens elsewhere in the world.
What we can control is what we do here at home.
And that's why there's even more of a premium on
macroeconomic stability and sensible policies. You know, I've watched labor
have already hit the alarm, the panic button, saying, look,
this is the time to surge the borrowing, surge the
(02:45):
debt and of course in turn surge the tax. Well,
that would be completely the wrong approach, that would alarm markets,
that would create more instability. This is a time to
be steady and have a tarme hand on the tiller.
Speaker 1 (02:57):
The EU overnight retaliatory. I don't know what has happens
post the pause, but do you worry that it's all
on among hundreds of millions of consumers all over the
world in the trade wark.
Speaker 2 (03:08):
I do not like seeing retaliatory action and tips attached,
because that sort of escalation harms everyone. What we would
like of course, is stability and calm so our exporters
can work out they can get the best prices for
their products. And when the tower situation is changing as
regularly as it is, it's very difficult for our exporters
(03:29):
to work out what's best for their business, and that
uncertainty in and of itself can be quite paralyzing. So,
of course we would like to see calm in the
global situation and an end to retaliatory actions, given.
Speaker 1 (03:41):
Our success so far or lately in America wine red
meat in particular, as somebody like hawksby able to give
you any sort of specific number around the hit to
your bottom line.
Speaker 2 (03:55):
Not at the stage, because the hit to our bottom
line will be affected, ironically, not by the ten percent tariffs,
but by the impact of a slow down in global growth.
And just how dramatic that slowdown is yet to be
seen and depends a bit on whether Trump is going
to be pausing tariffs for longer, what the retaliator reaction is.
(04:15):
What we do know is we're expecting lower growth among
our trading partners, particularly here in the Asian region. We're
forecasting they will grow by at least half a percent
less than we had thought. We are looking as inflation
effects that are still unpredictable, So all of that gets
factored into our forecasts and it's just too soon to tell.
I know that it's not a satisfying answer, but you'll
(04:38):
find that that's the response economists throughout this having.
Speaker 1 (04:40):
I mean, no one knows. I mean no one blames
you for this, because literally no one knows. Is it
fair to suggest you needed this like a hole in
the head.
Speaker 2 (04:47):
Ah? Look, New Zealand was gathering momentum in our economic recovery.
We were turning a corner strongly, and now we are
facing into a real headwind. However, we remain much better
positioned than many many countries throughout the world. I back
our exporters. They are wily. We are helping them access markets.
If anyone in the world can do okay out of this,
(05:09):
it's New Zealand.
Speaker 1 (05:10):
Okay. I know you're not going to help me out much,
but help me out a little bit. Given what you've
just told us, and the budget coming next month, where's
the nine billion dollars for guns and weapons and drones
coming from?
Speaker 2 (05:23):
That is coming from a combination of the capital allowances
and operating allowances that the government has set aside for
future budgets. We won't deliver all of that funding in
one budget. We will deliver it over successive budgets. And
what you will say to remember is it's not just
about the new money we've set aside and allowances, it's
our ability to reprioritize. In last year's budget, we found
(05:44):
twenty three billion dollars on savings that we directed to
better use elsewhere, including tax relief and investments and education
and health. So where you will combine our operating allowances
with our ongoing reprioritization program, and that will support investment
not only in defense, but of course the additional funding
that the health system, the education system need, the other
(06:06):
pressing priorities for government.
Speaker 1 (06:08):
So no new borrowing.
Speaker 2 (06:11):
Well wow, I'll tell you why there's a pause, Mike,
because right now the country is in deficit. So by
definition we are borrowing.
Speaker 1 (06:21):
Well, of course that I am new borrowing.
Speaker 2 (06:25):
No, No, We're going to stick to the allowances that
we have usage operating allowance and the indications that we've
made there. I view those as a ceiling. I don't
want to exceed those. I'm very conscious of new Zealand's
net debt position, which has climbed dramatically and more than
doubled under labor when up one hundred billion dollars don't
have very much to show for that, and so we
(06:46):
need to be prudent and careful so that New Zealand
is well placed. When global storms such as the one
happening right now come along, does.
Speaker 1 (06:54):
It push out our return to surplus annually?
Speaker 2 (06:58):
No, because, as I say, we're sticking to our fiscal strategy.
The thing that we have decided to do a slick
to our intention, which is to manage to hold in
such a way that we get back to surplus in
twenty seven twenty eight. Of course, I don't control the forecast.
Will will the events have an impact on that track?
Speaker 1 (07:15):
Say well, appreciate your time as always, Finance Minister Nikoloulis.
I think we've got a good insight there. For more
from the Mic Asking Breakfast, listen live to news talks
that'd be from six am weekdays, or follow the podcast
on iHeartRadio.
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