New Zealand will hold firm on its economic and fiscal strategy even as escalating trade tensions and financial market volatility cloud the global outlook, Finance Minister Nicola Willis said on Tuesday.
Willis said that while the global fallout from U.S. President Donald Trump’s sweeping tariffs — including fresh threats against China and the European Union — is significant, New Zealand’s economy is resilient enough to absorb the shock without altering its current plans.
“Though unwelcome, these impacts are likely to be modest in comparison with the impact for many other countries,” Willis told reporters. “We have enough resilience to withstand it and we are in a fortunate position relative to others that we can stick to our economic and fiscal strategy.”
Trump has imposed a unilateral 10% tariff on imports from New Zealand — the lower range of his proposed reciprocal tariffs. Wellington has opted not to retaliate.
Despite mounting risks, Willis reaffirmed the government’s commitment to returning the budget to surplus by the end of the decade. She said next month’s budget would incorporate the anticipated effects of the U.S. tariffs on economic growth.
The United States is New Zealand’s second-largest trading partner after China, accounting for about 12% of the Pacific nation’s exports, official data showed. Key New Zealand exports, including dairy, meat, and fruits, are among the world’s most widely traded commodities, giving the country opportunities to diversify its markets if needed, Willis noted.
Nonetheless, New Zealand’s economy has been under pressure, prompting the Reserve Bank of New Zealand (RBNZ) to slash interest rates by 175 basis points since August last year to bolster growth.
