Trade Minister Todd McClay. Photo: RNZ / Samuel Rillstone
Tariffs have been removed from more than $2 billion worth of New Zealand's exports to the United States, Trade Minister Todd McClay says.
US president Donald Trump on Friday (US time) signed an executive order cancelling tariffs on a wide range of food imports, including New Zealand beef and kiwifruit.
The new exemptions marked a sharp reversal, as Trump had long insisted his import duties were not fueling inflation for Americans.
But McClay said climbing prices and declining supply may have prompted the president to change tack.
"If you're not getting as much beef coming in because of the tariff rate, there are shortages and prices will go up."
The US buys New Zealand beef because it is high quality and the country does not produce enough of its own, said McClay.
The minister expected beef exports would return to the volume from before the tariffs were introduced.
He said about a quarter of New Zealand's trade to the US had tariffs removed, but he wanted more products stripped of the taxes.
"I and the prime minister have consistently made the case that we don't think it's justified, that our trade is complementary and well-balanced.
"But in the case of the change, particularly for kiwifruit worth about $250 million a year and meat or beef exports about $2b a year for New Zealand, this is welcome news and we would hope there could be more over time."
Meat Industry Association chief executive Nathan Guy said it was surprising but exciting news for farmers and processors.
"We've always thought these tariffs could indeed be inflationary for US consumers," he said.
"This is a very important market for us, indeed it is our number one, despite the 15 percent tariffs, because the demand has been so strong in the US."
Guy said it seemed beef would revert back to a 1 percent tariff which was "business as usual" - but lamb was still subject to 15 percent.
"We'll keep raising that issue, we'll work with the New Zealand Government and indeed ministers and officials and even the prime minister."
He was pleased to see prime minister Christopher Luxon recently met with Donald Trump, and believed New Zealand's relationship with the US was "in good heart".
"This is a positive step forward."
The change would restore a level playing field with key competitors like Australia, which had avoided the extra tariffs, Guy said.
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