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Speaker 1: The trade war tariffs against Mexico, Canada, China. Trump has

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Speaker 1: put them in place. Now they are starting to have

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Speaker 1: an impact on the market. The ends of It's fifty

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Speaker 1: finished half of percent down today. The S and P

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Speaker 1: five hundred has erased most of its gain since Trump's

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Speaker 1: election win in November, and all eyes will be on

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Speaker 1: markets overnight of course, to see there's going to be

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Speaker 1: further reaction. Gareth Kenan is infa Metric's chief forecaster with

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Speaker 1: US tonight. Hi, Gareth Evening, right, the New Zealand markets,

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Speaker 1: is that a big deal?

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Speaker 2: Well, it's not much of a shift here today compared

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Speaker 2: to what we've seen overnight with the initial reaction from

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Speaker 2: American and indeed some of the European markets as well.

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Speaker 2: I mean my feeling with some of the sort of

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Speaker 2: share markets and exchange rate as well, as they do

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Speaker 2: tend to sometimes take a little bit of time to

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Speaker 2: digest the news, and so I suspect that we may

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Speaker 2: not well have seen the end of it yet.

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Speaker 1: The reaction from Wall Street is that can we say,

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Speaker 1: basically that's they thought they didn't think that Trump would

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Speaker 1: follow through in the way that he has, and he's

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Speaker 1: made good on his word. I suspect that's right.

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Speaker 2: I mean you look at some of the initial market

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Speaker 2: reaction after the election of Trump back in November, and

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Speaker 2: the reaction was very much like always going to stimulate

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Speaker 2: the American economy. There might be a bit more inflation,

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Speaker 2: but you know, we're here for the growth kind of thing.

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Speaker 2: And I think people are now starting to realize that

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Speaker 2: actually there's some serious negative, medium term consequences that could

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Speaker 2: come out of some of the policies that are now

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Speaker 2: coming through.

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Speaker 1: A big question, of course, is how long do they last?

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Speaker 2: Yeah, well, I mean that's right. I mean you look

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Speaker 2: at previous episodes. I looked back at the GFC today

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Speaker 2: and the sheer market there eighteen months from peak in

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Speaker 2: two thousand and seven until it reached its trough out

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Speaker 2: in two thousand and nine, and then it was up

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Speaker 2: and down over the next two or three years before

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Speaker 2: we sort of got out of the other side of that.

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Speaker 2: You know, who knows with financial market Sometimes you look

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Speaker 2: and go, is it a one week event? In this case,

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Speaker 2: I suspect it's going to be something that could last

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Speaker 2: a lot longer, and we could be in a more

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Speaker 2: serious sort of down tune down with trend that lasts

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Speaker 2: for up to twelve months.

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Speaker 1: We had you reckon. So even if he pulls them

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Speaker 1: off in the next month or so, the damage has

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Speaker 1: already been arnold, will have already been done to things

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Speaker 1: like investment, to you know, labor hiring, that kind of stuff,

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Speaker 1: that the effects could linger for a year. Is that

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Speaker 1: what you're saying?

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Speaker 2: Look from a business point of view, I mean uncertainly

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Speaker 2: as a real killer when you're trying to make business decisions,

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Speaker 2: especially when it's some of that longer term stuff around investment.

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Speaker 2: And so if you're not sure how the landscape is

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Speaker 2: going to be in a week's time, in six months time,

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Speaker 2: then you are going to hold off on those decisions.

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Speaker 2: And I think you're right. Even if he does sort

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Speaker 2: of reverse some of these out and I'm not confident

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Speaker 2: that he will, that businesses are looking at it and going, well,

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Speaker 2: I'm just not sure how that landscape looks going forward,

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Speaker 2: and I'm going to hold off on making those sort

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Speaker 2: of big commitments and decisions.

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Speaker 1: And it's hard. I was listening to an auto industry

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Speaker 1: executive today who was saying, you know, how do you

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Speaker 1: exactly what your point? How are you meant to plan?

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Speaker 1: He wants us to move factories to the United States.

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Speaker 1: You know, currently they're doing it a lot of production

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Speaker 1: outside of the US. All that takes time, and I

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Speaker 1: don't even know if these tariffs are still going to

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Speaker 1: exist in two months, two years. That is how unpredictable

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Speaker 1: you are.

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Speaker 2: Yeah, and I mean, we have seen some responses from

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Speaker 2: our businesses over the last six to twelve months to

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Speaker 2: some of the previous tariffs that had come in for

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Speaker 2: the likes of China, which Biden or Trump had put

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Speaker 2: in and Biden had increased. In some cases, we have

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Speaker 2: seen decisions being made where production is moving out of China,

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Speaker 2: but it's not, of course, coming all the way back

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Speaker 2: to the US. Generally, it's impacting on some of those

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Speaker 2: other Southeast Asian nations where the tariffs aren't in place.

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Speaker 2: But yeah, when you're talking about penalizing the whole rest

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Speaker 2: of the world, including some of your your closest neighbors,

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Speaker 2: it does. It's a whole nother step up above that.

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Speaker 1: Really certainly is Gareth, thank you very much for that.

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Speaker 1: Gareth Kennan, who's the chief forecast Infimetrics and Wellington, eleven

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Speaker 1: minutes after Sex News talks, he'd be

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