New Zealand was largely a footnote in the Office of the US Trade Representative’s annual report on trade barriers, which left investors in the dark as to where President Donald Trump will fall when he unveils his Liberation Day tariff regime.
The report showed New Zealand’s most favoured nation applied tariff rate – the levy countries impose on imports to members of the World Trade Organisation – was 1.9% in 2023, with a zero percent duty on almost three quarters of agricultural goods, and two thirds of non-agricultural goods.
The kiwi dollar advanced to 57.95 US cents at 7am in Auckland from 56.72 cents yesterday.
New Zealand’s trade surplus with the US was US$1.12 billion in 2024, narrowing from US$1.19 billion a year earlier, and in line with the deficit the US runs with Jordan, which has a free trade deal with the world’s biggest economy.
The European Union’s applied tariff rate was 15.6% and Japan’s 3.7%.
The USTR said New Zealand’s restrictions on US pork over fears of animal disease “do not appear to be grounded in science and risk”, and that the office is monitoring law governing drug-buyer Pharmac, as well as protections for products from certain regions as part of its free trade deal with the European Union.
The report provided few clues about the scope of his tariff regime, and whether Trump will go ahead with a broad-brush 20% import levy on all nations – the level speculated in media reports – or place varying rates on nations.
One way or another
Wall Street was mixed with the Nasdaq Composite gaining 0.4% in afternoon trading, while the Dow Jones Industrial Average slipped 0.3%. Stocks in Europe were broadly stronger as the UK’s FTSE 100 gained 0.6% and Germany’s DAX 30 rose 1.7%.
“Asset markets are likely to remain on edge in the leadup to ‘Liberation Day’,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note.
Australian futures are pointing to a 0.1% increase for the S&P/ASX 200 index today.
The Reserve Bank of Australia yesterday kept its target cash rate at 4.1%, as expected, and noted the heightened uncertainty emanating from the looming US trade policy and geopolitics more generally.
That doesn’t appear to have deterred Bain Capital from re-listing airline Virgin Australia, with reports that the carrier intends to rejoin the ASX through an initial public offering as early as June.
Bain exited its stake in NZX-listed insurer Tower this week, selling $88.8 million of stock through a block trade on Monday.
And global tech investor SoftBank Group plans to invest US$40 billion in ChatGPT developer OpenAI, with US$10 billion this month and the rest coming later this year.
Milk prices rose at the latest Global Dairy Trade auction, with the GDT price index up 1.1% and an average selling price of US$4,250 a tonne.
Local data today include February building consents.
Reporting by Paul McBeth. Image from Marek Studzinski on Unsplash.
