By EMA Head of Membership & Export Simon Devoy

New Zealand exporters were dealt a tough blow at the start of August as the United States confirmed an unexpected increase in tariffs on our goods, from a widely predicted 10% to 15%.

It appeared the New Zealand government and our trade negotiators had been working on the assumption that the rate would be held at 10%, but that understanding evaporated with a decision made directly by President Donald Trump.

The shift reflects Washington’s new trade-first, numbers-driven approach, which leaves little room for nuance or negotiation.

In this worldview, a trade surplus equals punishment, and despite New Zealand’s relatively modest NZ$500 million surplus with the US, we found ourselves in the higher tariff bracket while competitors such as Australia and Chile remained at 10% thanks to deficits in recent months.

Minister for Trade and Investment Todd McClay, accompanied by New Zealand’s top trade negotiator Vangelis Vitalis, is in Washington to press the case for a reversal.

They are there to register concern, seek an explanation for the extra 5%, highlight the strain this places on New Zealand–US relations, and explore a path back to a lower rate.

However, the message from the US side has been blunt: the Trump administration believes America has been “ripped off” in past trade arrangements and is determined to redress what it sees as imbalances.

For New Zealand, the reality is we have limited leverage.

One example of an avenue  we could go down is strategic procurement, such as directing some of our planned defence upgrades towards US manufacturers to help offset the surplus. While not a quick fix, such moves could be part of a wider diplomatic and economic strategy.

Despite the blow, the latest announcement at least brings certainty after months of speculation and shifting signals.

Exporters can now plan around a known number, rather than bracing for a moving target.

While the increase will impose significant costs – few can absorb a full 15% without passing some on –  exporters are already negotiating with partners to share the burden.

One New Zealand exporter told us they had struck a deal to absorb 10%, with their US distributor carrying the remaining 5%. Inevitably, higher price points will flow through to American consumers, and some products could be priced out of the market where viable domestic alternatives exist.

For those facing this risk, diversification into alternative markets may become essential.

This is where history is firmly on our side: New Zealand exporters have repeatedly shown an ability to adapt to global challenges, finding innovative ways to deliver premium products to the world. From responding to biosecurity threats to navigating previous trade barriers, our exporters have consistently demonstrated resilience and creativity.

This moment is no different. It’s another opportunity to showcase the quality and distinctiveness of New Zealand goods.

The tariff hike is just one part of a broader shift in US trade policy. The early suspension of the De Minimis exemption, which allowed goods under US$800 to enter tariff-free, will now take effect on 29 August 2025, two years earlier than expected. The US had already suspended this for China and Hong Kong in April and is now extending it globally.

Implementation details remain murky, so exporters should brace for potential delays, added costs, and uncertainty at the border.

Meanwhile, the ongoing Section 232 investigations threaten further disruptions, with Trump floating a 100% tariff on semiconductors and reviewing pharmaceuticals and timber. Timelines are loose, and announcements could come suddenly.

MFAT and Minister McClay will continue high-level talks in Washington in the coming weeks. The EMA and ExportNZ are supporting these efforts, but the new global trade environment demands both realism and agility.

The certainty of a 15% tariff may not be ideal, but it gives New Zealand businesses the ability to plan, adapt, and turn the challenge into another example of how our exporters excel under pressure, reinforcing our reputation for resilience, innovation, and world-class quality on the international stage.