Pictured above: Donald Trump and Kamala Harris via for President of the United States of America on November 5, 2024.
As the United States gears up for its elections, concerns about the potential impacts on global trade and the New Zealand economy are mounting, according to a new report.
An Insight report released earlier this month from the New Zealand Institute of Economic Research (NZIER) warns that the outcomes of the elections – whether a victory for Donald Trump or Kamala Harris – could have “serious” repercussions for New Zealand.
According to NZIER Principal Economist Chris Nixon, the current global trade landscape is precarious. “The world trade landscape is dominated by Trump even though he has been out of office for four years,” Nixon says, highlighting the enduring effects of the US$300 billion in Chinese tariffs and an additional US$18 billion introduced by President Biden.
The report outlines that the US tariffs and subsequent retaliatory measures have created a “chilling impact” on both the US and global economies. Nixon points out, “We have the United States taking its ball and going home on trade policy,” exacerbated by the country’s refusal to appoint judges to the World Trade Organization’s appellate board, effectively halting the dispute settlement process.
While New Zealand’s exports to the United States are currently thriving, the broader global trade picture remains troubling.
“The real problem is that the United States is the engine of the world economy. Countries that have been exposed to the United States market have suffered and will suffer more,” says Nixon.
Chris Nixon.
He stresses that this situation negatively impacts New Zealand as a nation heavily reliant on exports. “US exports may remain strong, but exports to the rest of the world will fall,” he adds.
Nixon also raised concerns about the allure of tariffs for both Trump and Harris.
“We know that tariffs are the answer to everything for Trump/Republicans. But the real worry is that Harris/Democrats will also be seduced by their allure,” reads the Insight report.
“We are very unlikely to see the United States do a backflip of tariff policy,” he says, referencing historical precedents such as the Harley-Smoot tariffs of the 1930s, which “may not have caused the Great Depression, but they did not help.”
In light of these challenges, NZIER has outlined four key actions New Zealand can take to navigate the uncertain trade landscape:
- Stay the course: Continue pursuing further trade agreements, particularly in the Middle East and India.
- Project CER: Utilise parts of the Closer Economic Relations agreement to forge stronger ties with ASEAN and beyond.
- Encourage paperless trade: Advocate for more efficient, paperless trading practices to boost trade among existing partners.
- Create new trade opportunities: Position New Zealand as a strategic hub for exports and imports between ASEAN, East Asia, and the expanding South American market.
You can download the full report, here.
