Trade wars? - ANZ

Analysts at ANZ explained that the rhetoric has stepped up. 

Key Quotes:

"US Commerce Secretary Wilbur Ross downplayed impacts, noting that the cost increase will amount to less than a cent on a can of Coke or Campbell’s soup. 

He announced that he expects about 100,000 jobs to be created; separately, a representative from the beverage industry said this move will cost US beer producers over USD300m per year. 

Trump continued the provocative tweets, and the EU announced that they will consider tariffs on iconic US products. Trump responded that European cars could be next. How much is bluster? We may be about to find out. 

For New Zealand, the main interest is whether soft commodities get involved. It seems likely at this rate, as the agriculture sector is Trump’s support base. Initially this might help NZ exports through reducing direct competition and lifting the cost of livestock/dairy production in China through higher feed costs. 

But in the bigger picture, as a trade-dependent nation trade wars are not in New Zealand’s interests, as there is no guarantee that our exports would not get caught up in wide-ranging measures."