Shane Solly: Harbour Asset Management spokesperson on the possibility of more Trump tariffs

US President Donald Trump has signalled an incoming announcement of 25 percent tariffs on all steel and aluminium imports into the US. 

Trump also reaffirmed that he would announce 'reciprocal tariffs', meaning the US would impose import duties on on products in cases where another country has levied duties on US goods.

Harbour Asset Management's Shane Solly explains what this means for the New Zealand economy.

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Episode Transcript

Speaker 1 (00:00):
Shane solely from Harbor Asset Management is with me, Shane.
Good evening. We're going to look at the markets, Shane.
But first Trump and the tariffs. We don't have the
details yet, but we've got an outline of some steel
and aluminium tariffs from the White House.

Speaker 2 (00:15):
Yeah, he's back riling up market. It's getting us excited.
Over the weekend, He's had dropped a few interesting announcements.
He's talking about more reciprocal tariffs against people that pushed
back and his tariffs he's announced going to announced apparently
tomorrow twenty five percent tariff on steel and aluminium. And
he's also talking about having other cracad Our friends in
Canada and potentially a Mexico. So that's that's got people

(00:37):
a little bit excited.

Speaker 1 (00:39):
Yeah, how the market's reacting here?

Speaker 2 (00:42):
Look, US market was a bit soft on Friday night.
There was some strong data that suggested the US fit
A Reserve is not going to be cutting rates in
a hurry, but there was a little bit of an
anticipation of these reciprocal tariffs. So we did see the
US long term bond years up, the US dollar up,
and the US sheer market down. Locally, though, today. You know,

(01:02):
what we've seen is the US dollar New Zealand dollar
cross rate to fifty six and a half cents aluminium.
You know, we do explot a little bit of eliminium
to the States, about two percent of New Zealand's exports,
so not a big ee, but you know there is
potential that that global ramifications disruption and our market here
in New Zealand slightly down today Official Pike or again
leading things down a little bit. It is fifteen percent

(01:24):
of the market. Plat more more than fifteen percent. It
was down zero point four percent on the basis that
these Mexican tariffs are back on the list of things
to talk about.

Speaker 1 (01:34):
Certainly sounds like it, doesn't it. We know retail set
a hard time, but jab High five just reported a
very strong performance.

Speaker 2 (01:41):
Yeah, interesting one, right, and so that you came out
and they were their numbers for this particularly for January,
this saying their sales growth up twenty percent for January,
which is ten percent higher than expected. And I think
this is sort of people trying to say this is
an indication the New Zealand economy is showing a sign
of bottoming. And we saw companies like at you're building
and spark New zeal which is the old telecom muson

(02:02):
have a little bit of a pop on the back
of that that people thought New Zion was bouncing. The
question we'd raise is, you know, is it New Zealand
consumers spending more or is it jbi fi just taking
share off other retailers. You know, technology is sort of
thing people want to put their marginal money into. So
it's a tough one to make a quarter stage.

Speaker 1 (02:19):
Plus, they had some great sales over summer.

Speaker 2 (02:22):
You did, you did?

Speaker 1 (02:24):
Hey, The bean z ed Economics team was out today
calling for the rbn Z to cut the official cash
rate half percent next week. How does that compare with
what the market is pricing in?

Speaker 2 (02:36):
Yeah? Look really good, point Ryan. The So they've come out,
the beans ad team pretty well regarded. They've come out
and said ian due to cut, should cut rates by
half a percent next week. They've got their minatory policy statement,
it's a quarterly announcement and that would take it to
three point seventy five percent. And the Benz team have
gon a little bit further and said, look, we expect

(02:56):
more rates to be signaled at that time and a
bit of a quicker pace and perhaps what was talking
about in November, which is our last monetary policy statement,
and they're saying we could actually see their ficial cash
wrap back to three percent. When we look at what
capital markets are saying, definitely there's zero point five or
half a percent cut that's been sort of factored in.

(03:16):
The markets agree the economy is weak enough and inflation
is low enough to support lower rates. But we will
see markets react to the tone the words around the
cut if indeed there is a cut, of course, but yeah,
there is still a little way to go, but the
directions pretty much down.

Speaker 1 (03:34):
Yep, Shane, thank you for that interesting stuff. Shane solely
harbor Asset Managements on a Monday evening.

Speaker 2 (03:40):
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