By EMA Head of Membership and Export, Simon Devoy

 

With the global trading environment shifting rapidly, uncertainty is the new normal for Kiwi exporters.

The latest developments around tariffs from the Trump Administration show just how quickly the rules can change, and how vulnerable small, open trading economies like New Zealand can be when the rules-based global system begins to fray.

In late February, the United States Supreme Court ruled 6–3 that President Trump had exceeded his authority by imposing broad “emergency” global tariffs under the International Emergency Economic Powers Act (IEEPA).

The Court reaffirmed that under the US Constitution, only Congress has the authority to set tariffs.

At first glance, that might have seemed like good news for exporters around the world. The ruling removed the legal basis for the 15% “reciprocal tariff” that had been applied to most imports, including New Zealand goods.

But within hours, the Trump Administration moved quickly to reinstate tariffs under a different legal mechanism: Section 122 of the US Trade Act of 1974.

This allows the President to impose temporary tariffs of up to 15% for 150 days.

Initially announced at 10%, the tariff was soon raised to 15% and took effect on 24 February. In practical terms, that means many New Zealand exports to the United States continue to face a 15% tariff, essentially restoring the same rate exporters had already been dealing with.

Some agricultural products are expected to remain exempt under earlier announcements. But exporters still need to confirm classifications carefully at the HS-code level.

Meanwhile, other tariffs remain untouched by the Supreme Court decision, including Section 232 tariffs on products such as steel, aluminium and copper, as well as potential investigations into sectors like pharmaceuticals.

Given the highest court in the US just ruled the gathering of these tariffs to be illegal, there are serious calls for the collected tariffs to be returned.

If possible, these tariffs would be claimed and returned to the importer of record. However, the Supreme Court decision did not directly address the issue of refunds, so the subject is likely to drag on through the US Court of International Trade for several years, without any refunds paid until a final, unappealable ruling.

For New Zealand exporters, the result is a familiar but uncomfortable reality: tariffs remain in place, the policy environment is shifting, and the future after the 150-day window remains uncertain.

Extending the tariffs would require a vote of the US Congress, but the Trump Administration has already signalled that tariffs will remain a central pillar of its economic strategy.

For decades, countries like New Zealand have relied heavily on the stability of the post-war rules-based trading system. That system has underpinned global trade growth and given smaller trading nations confidence that markets would remain open and predictable.

But that system is now under strain. Trade tensions, geopolitical conflict, and economic nationalism are reshaping the global landscape.

We are seeing this not only in Washington but across the world. Russia’s invasion of Ukraine and the recent attacks on Iran by the US and Israel are reshaping the geopolitical environment, while President Trump’s aggressive use of tariffs is challenging long-standing trade norms.

For New Zealand exporters, trade diversification is the best protection against geopolitical shocks.

New Zealand has made strong progress in this area over the past two decades through an extensive network of free trade agreements.

Today, about 70% of New Zealand’s total trade is with countries where we have a free trade agreement. Importantly, that figure does not yet include the still-to-be-ratified agreement with India.

The government has had a long-term goal of covering around 90% of goods exports through FTAs by 2030, and that target appears realistic.

Aside from the United States, there are not many large markets left where New Zealand does not already have, or is negotiating, a trade agreement.

We are also eagerly awaiting the final text and National Interest Analysis for the New Zealand–India Free Trade Agreement. India represents a major opportunity for exporters and another step toward broader market diversification.

But diversification does not mean turning away from existing partners. Trade with the United States remains crucial. It was the second-largest export destination for New Zealand goods in 2024, with a total value of $9 billion.

The New Zealand government has criticised the tariffs but chosen diplomacy and negotiation rather than retaliation. That non-retaliatory stance reflects the country’s long-standing commitment to open markets and constructive trade relationships.

In the meantime, exporters will need to weather the tariffs and adapt.

Recently, in association with the American Chamber of Commerce in New Zealand, we hosted the ‘2026 Doing Business with the USA Workshop’, bringing together experts and exporters to share practical guidance on entering and expanding in the US market.

Speakers covered trade relations and tariffs, investing and setting up operations, marketing strategies, legal and tax considerations, intellectual property, insurance, visas and raising capital.

Events like this are essential because they help exporters navigate an increasingly complex environment.

We’ll continue to work with international business chambers in New Zealand to improve trade, investment and commercial ties for Kiwi exporters. These efforts will culminate in our Global X summit in September, where Kiwi businesses, government and trade agencies will come together to share strategies, build networks and explore opportunities in international markets.

At the same time, we’re working with ExportNZ to celebrate the success of New Zealand exporters. Applications are now open for the regional Export Awards, a staple of the events calendar that shines a spotlight on the hard-working exporters and gives the wider community an opportunity to celebrate export excellence. 

It’s also a great opportunity to get together with your fellow exporters to share successes and discuss challenges.

The global economy will always be subject to geopolitical turbulence and New Zealand exporters must plan for the unexpected.

But this critical pillar of the economy has gone from strength to strength, and the EMA will continue to champion our exporters while working to build resilience, market knowledge and reach into global markets.