Talking Tariffs: Resources to support NZ exporters with US tariffs

On April 6th, 2023, a significant shift occurred in the trade relationship between New Zealand (NZ) and the United States (US) with the introduction of a 10% baseline tariff on all goods entering the US from NZ. This tariff impacts finished products, part-finished goods, components, and even raw materials. For New Zealand businesses, this change complicates pricing, operational strategies, and competitiveness in international markets.

Understanding these tariffs is crucial for successfully navigating international trade. This post aims to equip NZ exporters with the knowledge and resources to adapt to this changing landscape.

Overview of the 10% Tariff on New Zealand Goods

The new 10% tariff adds to existing tariffs that New Zealand exporters were already facing. This blanket tariff represents a notable change in trade policy, potentially affecting various sectors. For instance, while certain items like steel and aluminum remain subject to a higher 25% tariff, other goods are facing new hurdles.

Interestingly, there has been no conversation about tariffs on services, allowing New Zealand businesses in service sectors some breathing room amidst these changes. However, manufacturers and product exporters need to act quickly to adjust their strategies.

Understanding De Minimis and Its Implications

For exporters, the de minimis threshold still stands. This provision allows lower-value goods, which currently sit below $800 in value, to enter the US without incurring tariffs. This exemption provides an excellent opportunity for e-commerce businesses. However, it is important to note this exception may change once the US establishes efficient systems for collecting duties on low-value goods, though no timeline is available for this adjustment.

E-commerce exporters must stay vigilant and prepare for any potential changes. Keeping updated on such developments allows businesses to adapt effectively.

Utilizing Resources for Tariff Rates

To help businesses determine applicable tariff rates, NZ exporters can utilize the Ministry of Foreign Affairs and Trade (MFAT) Tariff Finder. This online tool enables exporters to enter specific product codes and obtain precise tariff rates, including the new 10% tariff.

For example, if a New Zealand company exporting kiwifruit wants to assess the tariff impact, they can use the Tariff Finder to understand the additional costs they will incur. This data is vital for shaping pricing strategies and making informed decisions about market entry.

Shipping containers awaiting export processing.

Seeking Assistance: MFAT and Customs Services

Navigating the complexities of tariffs often requires expert guidance. The MFAT US tariff helpdesk is a dedicated resource where businesses can obtain clarity on tariff rates and product eligibility. Exporters should take advantage of this service to avoid costly mistakes in their exporting activities.

For more specific customs inquiries, the New Zealand Customs Service is an essential resource. They can provide tailored assistance concerning customs regulations that may impact shipments. Proper guidance can streamline operations and help ensure compliance with regulations, thus reducing the risk of delays or fines.

Strategic Considerations for NZ Exporters

Adapting to the new tariff environment requires solid strategic planning from New Zealand businesses. Here are several recommendations:

1. Evaluate Pricing Strategies: Assess the impact of the new 10% tariff on pricing and profit margins. Analyze how other companies are responding to the tariffs and adjust accordingly to remain competitive.

   
   

2. Communicate with Customers: Clear communication with customers about any price changes or possible delays due to tariffs is essential. Transparency will build trust and maintain strong client relationships.

   
   

3. Explore Diverse Markets: To reduce dependence on the US market, consider expanding into other countries with favorable trade agreements or lower tariff barriers. This strategy can mitigate the effects of the tariffs on profitability.

   
   

4. Stay Updated: Keep informed about changes in tariff policies. Remaining alert to updates in US trade policies allows businesses to be agile and adapt quickly to new conditions.

   
   

Key Takeaways for Exporters

The recent introduction of a 10% tariff on New Zealand goods entering the United States marks a major turning point in international trade. While challenges exist, opportunities can arise for adaptable exporters. By leveraging available resources, understanding tariff implications, and employing strategic planning, New Zealand businesses can navigate this new terrain.

As trade continues to evolve, diligence, proactivity, and informed decision-making will be crucial for maintaining competitiveness in a challenging international market.

Shipping crate labeled for international export.