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Speaker 1: Business leaders think that Donald Trump's tariffs could have a

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Speaker 1: more severe global impact than the pandemic or the GFC.

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Speaker 1: ASB and Talbot Mills have done a survey of more

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Speaker 1: than three hundred Kiwi business leaders and two thirds of

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Speaker 1: them so they're really worried about the tariffs. But Ben

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Speaker 1: Speedy of ASB told Kerry would in this morning that

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Speaker 1: far fewer businesses have actually taken any action on it.

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Speaker 2: Whilst two thirds of companies do understand the challenges around tariff's,

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Speaker 2: only ten percent of companies have actually made changes to

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Speaker 2: their business to be able to address this volatility. And

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Speaker 2: so that's what we really encourage businesses to do is

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Speaker 2: actually to start thinking through that strategy.

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Speaker 1: And Oliver Hart, which is the New Zealand Initiative executive

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Speaker 1: director and with us.

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Speaker 3: Hey, Oliver good evening. He I mean, do you think

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Speaker 3: that they're.

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Speaker 1: Overblowing it or are they on the money that this

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Speaker 1: is bigger the pandemic or bigger than the GFC.

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Speaker 3: I think they're on the money, because I mean the

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Speaker 3: GFC and the pandemic were all off of three or

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Speaker 3: four years, whereas the destabilization of globalization, the tariff's, the

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Speaker 3: Trump is im pausing. They could actually do give rail

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Speaker 3: the global economy for decades to come, and there is

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Speaker 3: so much uncertainty about that. I mean, with the pandemic,

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Speaker 3: we knew it was going to be over after a

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Speaker 3: few years. With this teriff uncertainty, and of course the

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Speaker 3: state of the WTO, which really barely exists anymore, the

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Speaker 3: uncertainty is there for a very long period to come.

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Speaker 3: In I think that's reflected in the pool.

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Speaker 1: Do you think that he is exporting the idea of

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Speaker 1: the tariffs as in, do you think people are going

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Speaker 1: to look at this and go, that's a great idea,

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Speaker 1: we should do it too.

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Speaker 3: No, I don't think so at all. I think for

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Speaker 3: most countries it is pretty clear that their prosperity is

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Speaker 3: built on trade, and we need free trade to succeed

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Speaker 3: and to be prosperous again. But as long as America,

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Speaker 3: as the word's dominant economy, is pursuing this teriff policy,

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Speaker 3: there will be global repercussions. I think. Actually, when you

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Speaker 3: look at the pool, it's not so much that we

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Speaker 3: are concerned about the terriffs that we have to pay ourselves.

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Speaker 3: It is actually about the secondary effects, where for example,

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Speaker 3: China is paying massive amounts of terrors now, and that's

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Speaker 3: slows down the Chinese economy and that has negative impacts

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Speaker 3: on it. So it's a secondary effect and sometimes a

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Speaker 3: tertiary effect. So I think that's reflected in the poll.

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Speaker 1: There is a proportion of businesses and it's not insignificant

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Speaker 1: who think that the tariffs are an opportunity. Do you

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Speaker 1: see that?

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Speaker 3: Yeah, of course, I mean there will be some opportunities

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Speaker 3: because it means that for countries that previously couldn't actually

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Speaker 3: previously traded with the US can't really trade to the

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Speaker 3: same degree anymore, and they will redirect some of their goods,

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Speaker 3: maybe at cheaper prices to US. So maybe there are

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Speaker 3: some opportunities in there, but overall, of course, the net

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Speaker 3: effect is deeply negative.

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Speaker 1: Now it's a very small proportion ten percent to have

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Speaker 1: actually done anything to mitigate the effects. What should these

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Speaker 1: businesses be doing.

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Speaker 3: Well, it's a very good question. I'm not surprised it's

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Speaker 3: only ten percent, because right now you cannot really plan

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Speaker 3: that far ahead. You don't know how to respond because

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Speaker 3: these terrffs change, They change sometimes on a daily basis,

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Speaker 3: depending on the mood of the president, and therefore it

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Speaker 3: is very hard for businesses to really plan to adapt,

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Speaker 3: to find different strategies, and I think that's what you see,

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Speaker 3: but only ten percent say that they've actually made some changes.

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Speaker 1: Do you not think, Oliver, that we should just take

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Speaker 1: the approach it? Take it? I mean, should the default

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Speaker 1: setting that we have not be Donald Trump is bluffing

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Speaker 1: and he will unwind this.

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Speaker 3: I'm not so sure he's entirely bluffing. Of course. We

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Speaker 3: have seen a lot of times that he has shown

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Speaker 3: this tackle behavior where he backs down after some pressure

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Speaker 3: from others. But some of the tariffs are there to say,

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Speaker 3: and actually we've seen it again today that he's increased

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Speaker 3: the steel and aluminium tariffs. So I don't think he's

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Speaker 3: going completely in reverse now and restore the trade order

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Speaker 3: we had before. So I think it is justified to

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Speaker 3: think that the destabilization of the global trade system will

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Speaker 3: be with us for some time to come.

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Speaker 1: Oliver, it's good to talk to you mate. Thank you

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Speaker 1: very much for that, appreciated Oliver Hart, which New Zealand

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Speaker 1: Initiative Executive Director.

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