US tariff hit: $900m or 0.2% of GDP ‘manageable’ but global fallout could be worse - Westpac

A 10% tariff on exports to the US could cost the economy $900 million, impacting GDP by 0.2%. Economists warn of significant indirect effects on global growth and potential impacts on commodity prices.

New Zealand’s meat and dairy industries face challenges, with the meat industry particularly exposed due to US market reliance. The blanket 10% tariff on all exports to the United States would cost the economy about $900 million or about 0.2% of GDP and is “likely to be manageable”, says Westpac chief economist Kelly Eckhold.



The indirect effects from lower global economic growth and a wider trade war would be more significant but were harder to assess, he said. Eckhold noted Reserve Bank (RBNZ) analysis suggesting that significant US tariffs, accompanied by retaliation, could lower trading partner growth by as much as 1%. Weaker global demand was likely to depress commodity prices, Eckhold said.

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