US tariffs: What do they mean for New Zealand businesses

Last updated 10 April 2025 | 10:36 am

The recently announced 'Liberation Day' tariffs impose sweeping additional duty on goods imported into the United States (US).  Originally to be effective from 5 April 2025, a 90 day reprieve has been announced, and the additional tariff will apply at 10% across all countries other than China (previously it ranged up to 50%). A 125% tariff will apply to Chinese origin goods, effective immediately.

The tariffs apply to goods across most sectors.  Some sectors are currently excluded while they work through a more detailed analysis. This currently includes copper, pharmaceuticals, semiconductors, lumber articles and certain critical minerals, and energy and energy products.

The tariffs do not include services provided to US-based customers, and therefore New Zealand service providers should not be directly affected

These tariffs are part of the 'America First' trade policy, aimed at protecting US industries and addressing the trade deficit. Historically, New Zealand has maintained a strong trade relationship with the US, making these tariffs particularly significant.

All businesses involved in the movement of goods into the US, whether directly or indirectly, will experience an impact from these changes, whether through US reciprocal tariffs or due to any retaliatory measures against the US in other territories.

At face value, these tariffs will increase the cost of goods imported into the US market, reducing competitiveness against domestic US products.

New Zealand’s Prime Minister, Christopher Luxon, has indicated that New Zealand will not impose retaliatory tariffs on US imports, and therefore businesses sourcing from the US should not experience a direct impact.

As a first step, we recommend ensuring your business understands the impact of the changes. It is crucial to have good visibility over your supply chain, customs obligations, and pricing mechanisms. This is necessary to map out possible tariff impacts and begin planning possible mitigation options.

In the shorter term:

• Gain clarity over your supply chain and ensure you have robust data in terms of what is currently declared to customs authorities based on your HS (product classification) codes and valuation methods.

• Utilise the data to model the impact and determine the cost implications.

• Examine contractual pricing with suppliers and/or customers to ascertain whether you have to absorb increased tariff costs or if you can pass them on (or a combination of both). Is contract renegotiation possible?

• Evaluate the following:

  • Current and alternative customs value pricing strategies to determine whether there are any simple wins to reduce, mitigate, or defer duty liabilities.

  • Your country of origin claims, to check they are supportable. This is critical to tariff management.

  • Whether all available duty and tax incentives are optimised throughout your supply chain.

In the longer term:

• Given uncertainties in the current situation, more significant restructuring decisions will likely be made in the longer term. This may include exploring alternative export markets (to reduce dependency on the US), shifting supply chains (moving production to other manufacturing locations), and alternative transfer pricing policies. Clearly, there are many aspects other than tariffs to consider.

If you are unsure of the impact on your business or have any questions regarding the above, please reach out to one of our experts below or your usual PwC contact.