Senior economist and trade expert John Ballingall says there are a number of ways New Zealand could be impacted by a tariff war between the US and China.
Mr Ballingall talked to Corin Dann on TVNZ's Q+A about his take on the looming trade war between the US and China and its impact on New Zealand.
"First of all, despite what the president thinks, tariffs do not make an economy grow faster. The global economy will slow if there is a tariff war. That means less demand for what we sell to the world," Mr Ballingall said.
"Secondly, it creates enormous uncertainty for business, and when businesses are uncertain, they don’t invest and they don’t hire," he said.
"And thirdly, and perhaps most importantly, New Zealand is always trying to reduce tariffs, to reduce transaction costs so that we can trade more easily. A tariff war, a trade war, goes in exactly the opposite direction, and for a small open economy, that’s very, very worrying."
Mr Ballingall says it is concerning New Zealand hasn’t been exempted from US steel and aluminium tariffs.
He said there are a number of things New Zealand can to with the limited power it has, which include continuing to work on exemptions and attempting to have faith in the World Trade Organisation.
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