The New Zealand finance minister believes that the global economic environment is unfavorable for the NZ exporters to make profits due to the ongoing trade war between the US and China and also the effects of Brexit.
The impact of Brexit on New Zealand
New Zealand has had friendly relations with not just the European Union but also the UK, and the New Zealand government has been working with the EU and the UK to continue to boost their relationship with both as the UK moves out of the union. There has been quite an impact of Brexit on New Zealand; some of them are:
Wine: New Zealand is the biggest exporter of Wine to the United Kingdom and is an important partner for the country. It will impact not only the exporters but also the distributors and the customers. No one really knows how things will pan out with the Brexit deal, and everyone is bracing for something that they have not encountered before. The main reason is the possible log jam at the ports of Britain, and if the UK decides to impose tariffs on Wine, then it can be a bitter deal for the exporters.
Dual Citizenship: Many Kiwis hold dual citizenship living in the UK, and there is a lot of scaremongering with the employers blaming Brexit for job cuts. Moreover, due to a drop in exchange rates, it is no longer conducive for transferring money, and that has made those with dual citizenship frustrated. They just want to know which way the deal goes so that they can get on with their lives.
Meat: New Zealand exports meat in large quantities to Britain, especially sheep. If there is a no-deal, then the exporters should be preparing for the worst.
Small businesses: Many small businesses in New Zealand depend on Britain for their store contents. The problem arises for those items which have a small shelf life. Moreover, they also fear that they will not have any variety to provide to their customers if they don’t purchase from Britain which they have been doing for so long.
Impact of the trade war
The escalating trade war between the US and China will have a global impact with many institutions like the IMF and the WTO warning that it could result in a slowdown in the global economy. New Zealand who has had good relations with both the US and China will have a flow-on effect and also significantly impact their exports.