The Country 24/03/25: Stefan Vogel talks to Jamie Mackay

The US’s relatively small trade deficit with New Zealand has so far helped keep New Zealand food and agri exports off the US trade tariff ‘wheel of misfortune’, but the tariff threat remains, RaboResearch's GM says in a newly-released global report.

 

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Episode Transcript

Speaker 1 (00:00):
A recent report out from Rabobanks said the USA's relatively
small trade deficit with New Zealand has so far helped
to keep our food and agri exports off the US
trade teriff queil of misfortune. But the teriff threat remains,
so says the guy who wrote the report, Ravo Research

(00:23):
GM Australia and New Zealand, Stephan Vogel out of Sydney. Stephan,
are we on tariff death row with America?

Speaker 2 (00:30):
Well, let's put it this way, we are probably not
on the wheel of Misfortune's top list. So clearly, if
you think about it, the US is using different ways
of assessing shall I impose tariffs on another region or not?
The first one usually just goes and says, well, you
guys are close to me Canada and Mexico and across

(00:53):
your borders. There are coming plenty of refugees in my
country and I want to limit that as a US president. Then,
so with that, there has been quite a bit of
pressure on Canada, Mexico, and obviously always China is in
that mix as well, not for refugee reasons, but clearly
more for the reason of other historic trade relations. And

(01:14):
the argument these days is often that there is material
coming in that is used for drug production, So that Canada, Mexico,
and China are the top of the list, which is
first of all good, We're not close to them, we're
not of that ranks. But then the second way of
that US president is looking at terrace is often in
terms of is the country that I'm intending to impose

(01:36):
terris on actually running a deficit or a surplus of
trade with me? So the US obviously always loss if
other countries spend more money on US products than the
US is spending on importing products from that country. Unfortunately
as a total, New Zealand has a bit of a
problem there, so we are actually shipping more to the

(01:56):
US than the US is buying is selling the New
Zealand market.

Speaker 1 (02:01):
China is obviously the biggest trade deficit, followed by Mexico. Interestingly,
in third places Vietnam. What has Trump done to Vietnam
so far, not.

Speaker 2 (02:11):
So much, And that gives us a bit of hope
that right now he actually doesn't tackle every of those
countries immediately, but really focuses on a few. And as
that North America's neighbors are in the mix. The reason
where if you think about New Zealand. Why we might
be actually a little bit worried about it is actually

(02:33):
twelve and a half to thirteen percent of our agricultural
exports as New Zealand actually move into that US market.
So we're talking about a number slightly above five billion
New Zealand dollars worth of goods that last year went
over the US has grown quite a bit, so that
number actually has almost doubled in the last eight nine years.

(02:55):
So with that we need to watch the products like beef, dairy,
sheet meat, and probably also things like wine as well
as some of the kiwi fruit, and there we actually
don't expect that we're right away in a really bad spot.

(03:15):
But if you think about beef, New Zealand as well
as Australia are key export suppliers into that market, and
so is Canada and Mexico. So if Canada and Mexico
would face a tariff, and that one is all the
time in the talks here, So with that, if they
get twenty five percent tariff, there might actually be a
little bit of a benefit for us that we could
see that there's even stronger demand for New Zealand products.

Speaker 1 (03:38):
So sorry, Stefan, We've really got to watch out obviously
on the beef and the wine, but you talked about
dairy as well, and it's a significant export market, but
only only six percent of our total dairy exports are
going there, so perhaps we can pivot with the dairy one.
I just want to wrap this if I can, by
just asking you what do you expect to happen on

(03:58):
April the second?

Speaker 2 (04:00):
And nobody knows. Trump has posted farmers of America be prepared.
I'm going to put some terraces on agriculture. Nobody knows
what's going to happen. But as you said, for dairy,
it is a rather small volume that goes over there
from the total production, less than ten percent. While if
we're looking at meat, especially for the b side of things,

(04:22):
that is an important part, a very big destination, the
largest we have these days. For wine, it is a
very important destination. So those products are probably more at
risk than the dairy side.

Speaker 1 (04:33):
We well white with bited breath to see what he
comes up with between now and April the second. You
probably change his mind's mind, should I say a few
times if he's true to form. Stefan Vogel out of
Rabobanks Sydney Office. Thanks for some of your time today
on the country.

Speaker 2 (04:48):
Thanks for having me, and I agree with you. I
hope that he changes things because very often there is
a big diversion, big messages, big headlines, and then nothing
happens because he gets something else done he actually wanted
to get done. So maybe not much happens in a
couple of days. When we hit April two,