Research released today by ASB, supported by Talbot Mills Research, shows Kiwi businesses see US tariffs as more impactful than Covid-19 or the Global Financial Crisis.
More than 300 business leaders, including CEOs and founders, contributed to the study, giving their insights on President Trump’s recently announced trade policies.
- Two-thirds (67%) of businesses are concerned about the impact of proposed US tariffs in the next 12 months, with nearly 80% of exporters concerned.
- Wine, meat, dairy are seen as the most vulnerable within Food and Fibre sector.
- Nearly one-quarter (24%) of Kiwi businesses see at least some opportunity in the tariffs.
- More than one-third (39%) of respondents listed support of banks as critical to navigating the current environment.
“We’re seeing sustained market volatility with the ever-changing political decisions around tariffs, which naturally creates a heightened sense of uncertainty for businesses,” says ASB’s Executive General Manager Business Banking, Rebecca James.
President Trump first announced tariffs in April as part of the ‘America First’ trade policy, aimed at protecting US industries and addressing the trade deficit.
The tariffs are set at 10% for most countries, including New Zealand, with China a notable outlier where a larger tariff has been applied to Chinese origin goods.
Additional proposed tariffs higher than the 10% baseline were paused for a 90-day period and will be reviewed in July.
Businesses are split on how long potential disruption could last. A slight majority (51%) of Kiwi businesses are optimistic that the economy will recover quickly, while 38% predict a prolonged economic downturn for the country and the remainder were unsure.
Ten percent of businesses and 14% of exporters have already taken action to reduce the negative impacts of tariffs including raising prices, shifting markets or cutting costs.
Just under one-third (30%) believe they can make up losses through new customers or cost savings; 25% from operational efficiencies, and 22% from other revenue streams. 22% are unsure, with uncertainty highest among small businesses.
“The current market volatility and geopolitical tension may be our ‘new normal’, but we’ve been in positions of global uncertainty before and the research shows Kiwi businesses are already thinking about actions they can take to make their business more resilient and generate returns,” says James.
She encourages businesses to stay connected to industry partners, trade advocacy groups and their banks to share knowledge and ideas when it comes to growth and scale.
“Business customers are relying on us more than ever to navigate the current environment, and we’re seeing this through an increase in trade finance and a rise in currency hedging enquiries.
“Our advice is to start exploring options now. We’re seeing customers adapting their business strategy in all sorts of ways, so solutions for your business might look like assessing AI to improve workflow, adjusting your supply chain, selling down stock before new inventory orders, building new trade relationships or exploring untapped markets.”
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