Summarised by Centrist
Prime Minister Christopher Luxon has weighed in on Donald Trump’s new global tariff regime, warning that the “profound shift” away from free trade risks igniting a full-blown economic crisis.
“This is hurting growth prospects at a time when the global economy needs certainty and confidence,” Luxon said, following a caucus meeting in Wellington. He noted KiwiSaver balances had already taken a hit, comparing the fallout to the 1987 crash, the GFC, and the onset of COVID.
Luxon’s comments come after Trump doubled down on a sweeping tariff plan from the White House, threatening China with an additional 50% tariff unless it backed down. The policy has triggered a market nosedive and fears of retaliatory trade wars.
“What actually is concerning me is the shift away from agreed rules,” Luxon said. “A trade war is, frankly, in nobody’s interest. It will slow global growth, it will hurt jobs and reduce the amount of money we have in our wallets.”
Finance Minister Nicola Willis echoed the concern, warning global inflation could rise by as much as 0.5%. She described the situation as a “historically significant global event,” but said there were no current plans to alter the May Budget. “Tough times are ahead,” she cautioned.
Luxon sought to reassure New Zealanders that the country was entering this turbulence from a “very strong base,” backed by trade deals, competitive exporters and resilient primary industries. “New Zealand’s best days actually lie ahead of us,” he said.
Labour leader Chris Hipkins took aim at Luxon and Winston Peters for previously calling for a “closer relationship” with the US, saying it had failed to protect New Zealand’s interests.
Image: Jakobandrewnz
