US tariffs: New Zealand lamb, dairy and wine exports face higher costs

By Monique Steele of RNZ

New Zealand’s primary sector exporters say they are not surprised the United States is trying to increase and maintain import tariffs on foreign goods.

Most New Zealand exports already faced a 10% import tariff to the multibillion-dollar market.

But with that Section 122 tariff set to expire next month, a 12.5% tariff was being proposed to take its place.

American officials said the tariff was targeting countries, including New Zealand, that were not doing enough to prevent forced labour in the supply chain.

Kiwifruit will continue to be exempt from the new tariff, Zespri confirmed on Thursday, as well as beef, timber and offal.

But wine, for which the US is the top export market, is not exempt.

New Zealand Winegrowers chief executive Philip Gregan said changing tariffs made it very difficult for wine exporters to plan their shipments and market investment.

“We’re not entirely surprised that the US is looking to find another way to impose blanket tariffs across products,” he said.

“According to all reports, we’re looking at a 12.5% tariff on New Zealand wine going into the US, but we don’t know the timeframe for implementation, or in fact truly if it’s going to be implemented.

“But we presume it will be.”

Gregan said the US tariffs created a lot of uncertainty for the sector.

“There’s been this review going on. We all knew that in all likelihood it was going to lead to more permanent tariffs.”

Dairy, lamb to face new tariff

A new tariff was not unexpected by the dairy sector, already facing the 10% and likely to be subject to 12.5%.

Kimberly Crewther of the Dairy Companies Association of New Zealand said tariffs were never welcome.

“DCANZ agrees with the New Zealand Trade Minister’s [Todd McClay] assessment that this investigation has been aimed at maintaining tariffs in the US, and there has been no finding that forced labour is a feature of New Zealand dairy supply chains.”

She said it was concerned the new tariff proposal would again disadvantage New Zealand exporters over others sending product to the US.

“In particular, the tariffs will not apply to Canadian dairy products exported to the US under the USMCA agreement, meaning our unsubsidised exports are at a significant tariff disadvantage compared with unfairly priced Canadian dairy exports.”

New Zealand beef exports will continue to dodge the US import tariffs, but not lamb.

Beef and Lamb New Zealand chairwoman Kate Acland said lamb was expected to rise to 12.5% from the current 10%, though it was not likely to be immediate.

“Certainly we don’t think that this tariff is justified,” she said.

“We’re disappointed at the increase to 12.5%, but to be honest we were expecting it could have been worse.”

Acland said many countries were caught up in the situation, but it had nothing to do with New Zealand’s farming practices.

“This is not about New Zealand; this is part of a broader US trade strategy to put tariffs on imports.”

She assured there was no evidence of forced labour in the sector in New Zealand.

The United States spent nearly $7 billion on New Zealand’s food and fibre exports in the year to June, according to Government data.

- RNZ