Looking ahead: NZ-US Trade

As the world awaits the return of Donald Trump to the White House, there has been a lot of conversation about what any resulting shifts in global trade dynamics might be. I thought it was a good time to add to the conversation my key observations for New Zealand farmers in Mid Canterbury. 

Where We’ve Been and Where We’re Heading

To understand where we may be heading, it's useful to reflect on recent history. During Donald Trump’s previous presidency, his trade policies, particularly tariffs on imports from major economies like China, reshaped global trade dynamics. By 2019, farmers in the U.S. were struggling, many receiving federal assistance to keep them afloat.

Despite the US global trade policy at the time, New Zealand's exports to the U.S. remained generally stable. This stability allowed New Zealand's exports to the U.S. to continue to grow, even after a slight plateau during the early stages of COVID-19. The bilateral trade between New Zealand and the U.S. saw a strong recovery and growth trajectory post-pandemic and in 2023, the U.S. was New Zealand's fastest-growing major market, with a growth rate of 16%.

By the end of March 2024, the US had surpassed Australia to become New Zealand’s second-largest export market, reaching NZ$14.6 billion.  

What’s Driving This Growth?

This growth was driven by primary sector products dominating the goods export portfolio to the U.S. In addition, there is a strong U.S. demand for health-focused, high-quality imports. New Zealand’s reputation for safe, natural food aligns well with the growing preference for health-conscious meat and dairy. A study by Rutgers University found that American consumers prioritise health benefits, taste, and price when selecting meat products, which bodes well for New Zealand exports. With its dairy and meat products known for their nutritional quality, New Zealand is likely to remain competitive in the U.S. market regardless of global trade conditions.

The Relevance for Mid-Canterbury Farmers

For farmers in Mid-Canterbury, these trends are particularly relevant.

• Core exports: Dairy, beef, sheep, and grains from the region is well-positioned to meet U.S. demand.
• Competitive edge: Even with potential shifts in global trade, New Zealand’s focus on product quality and transparency offers a competitive edge which will hopefully see us through.
  
  

Looking Ahead

Only time will tell what the impacts will be for Mid Canterbury and we will be keeping a watching brief on any developments.