World awaits as Trump is set to roll out planned tariffs tomorrow

Though no tariffs on New Zealand have been announced, we are an export heavy country.

The US is our second largest export destination, valued at $9bil according to Stats NZ.

Jittery markets and pessimistic headlines may only worsen financial anxieties young people are facing, with 53% of young Kiwis saying they often or always worry about money.

Senior lecturer of Economics and Finance at AUT Dr Rahul Sen explains that the risk for New Zealand lies in how our trade partners will be affected.

“The indirect effects are likely going to come through [with] how [the] Chinese economy is going to be affected, because China is our largest trading partner.”

Dr Sen emphasises that people should be prepared for the intense short-term impacts, but that “medium-term will depend a lot on how this trade war actually ends up affecting people's lives.”

Unpredictability has plagued the announcement, with details still unclear as to how the levies, or which levies, will be implemented.

Aggressive threats made by Trump have further fuelled worry, threatening a 200% tariff on wine and champagne from European Union countries in early March.

In the past weeks, this uncertainty has manifested in turbulent stock markets both locally and internationally.

Dr Sen explains tariffs are taxes on imported goods, “so therefore, foreign goods imports are going to become costlier.”

LISTEN: Interview with Senior lecturer of Economics and Finance at AUT Dr Rahul Sen

Tariffs may also bring positive opportunities, Dr Sen says how it could provide a chance for New Zealand to diversify its trading basket.

“Those countries which are affected by US tariffs, they could start trading more with New Zealand, so there could be more trading opportunities here [for] New Zealand exporters as well.

“If we do have those new export markets, then I think that will cushion some of that adverse effect on the job opportunities that we are thinking that will turn up.”

Trump claims protecting the US’ economy is his reason for imposing tariffs, with White House press secretary Karoline Leavitt explaining that “he’s doing this in the best interest of the American worker.”

However, economists warn that more harm could come from the broad tariffs.

Dr Sen highlights that though prices will increase for US consumers, profits will reduce for exporters.

“From the exporter's perspective, it's reduced opportunities to sell your goods, [...] and therefore a drag on your economic growth.”

Depending on your type of fund, KiwiSaver balances may take a tumble as overseas markets remain unstable.