US President Donald Trump unveiled the tariffs of his new world trade order, with New Zealand facing a stiffer rate of 15% than what was flagged on Liberation Day, prompting trade minister Todd McClay to start engaging with the world’s biggest economy.
Stock markets across Asia were weaker as investors let the impact of the new import levies sink in, with the S&P/NZX 50 index dragged lower by heavyweights Fisher & Paykel Healthcare and Ebos Group.
SkyCity Entertainment Group posted the steepest decline on the local bourse, with casino operators in the doldrums as Australia’s Star Entertainment plumbed new lows when a deal for its Brisbane Queen’s Wharf hotel fell through.
And Sky Network Television has picked up the keys to TV3-owner Discovery NZ, laying out its pathway to profitability with some $20 million of doubled up costs seen as ripe for pruning.
Feeling liberated?
Trade minister Todd McClay is seeking an urgent call with the US Trade Representative after President Donald Trump’s global tariff regime set New Zealand’s rate at 15%, higher than the 10% flagged in the initial April reveal.
“At 15%, the impact will be considerable for exporters, many of whom absorbed or passed on the earlier 10% rate. At 15%, that becomes much harder,” McClay said in a statement. “Our focus now moves to engaging directly with the US on this current announcement to seek changes to this decision.”
The New Zealand dollar traded at 58.79 US cents at 5pm in Auckland from 58.95 cents at 7am, down from 59.46 cents yesterday.
ANZ New Zealand economists said the higher tariff rate undid the relative advantage the nation was set to enjoy, with the 15% level putting it on par with most other trading partners of the US.
“The chill of uncertainty on global investment and consumption looks set to persist for a while yet given the volatility in US policy over recent months, presenting a longer-lasting headwind to global trade and growth,” ANZ’s NZ economics team said in their weekly data wrap. “It's impacting things here too: amongst firms planning to decrease investment, the global economic outlook was the second most-cited reason (after the domestic outlook).”
A sea of red
New Zealand’s stock market joined declines across Asia as investors digested the new trade order, with Australia’s S&P/ASX 200 index down 0.9% in late trading, while Japan’s Nikkei 225 dropped 0.7% and Hong Kong’s Hang Seng declined 0.6%.
The NZX50 fell 94.34 points, or 0.7%, to 12,729.4, with 32 stocks declining, eight gaining and 10 unchanged. Turnover was $108.1 million across the main board.
F&P Healthcare was the biggest drag on the index, falling 2.2% to $36. The medical devices maker has major manufacturing in Mexico, which got a 90-day extension to facing tariffs to allow for negotiations to continue.
Healthcare products maker Ebos was another weight on the index, falling 2.3% to $39.98, following healthcare stocks lower after Trump wrote to 17 global pharmaceutical companies asking them to cut their prices for the US.
SkyCity led the benchmark lower, falling 3.9% to 98 cents. Across the Tasman, Star sank to a new low after the proposed sale of its 50% stake in the A$3.6 billion Brisbane resort fell through.
Only on Three
Sky TV fell 1.3% to $3.05 after completing its acquisition of Discovery NZ, and provided more details on the free-to-air television network, including $19 million of duplicated costs identified to improve profitability.
Kiwi Property Group was the most heavily traded stock with a volume of 2 million shares, as it dipped 0.5% to 97 cents.
Napier Port posted the top 50’s biggest gain on the day, up 1.9% at $3.19, while Mainfreight snapped a four-day decline, rising 0.5% to $59.50. Managing director Don Braid bought 10,000 shares on market on July 31 at $58.15 per share.
Outside the benchmark index, Comvita climbed near a six-week high as it gained 8.7% to 50 cents, while AFT Pharmaceuticals rose 1.1% to $1.12 after the painkiller maker affirmed earnings guidance at today's annual meeting.
Warehouse Group rose 1.2% to 83 cents after interim chief executive John Journee was tapped to replace Joan Withers as chair when she steps down at the November annual meeting.
Reporting by Paul McBeth. Image from Curious News.
