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Speaker 1: We've had the Prime Minister on Instagram today, Nichola Willis

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Speaker 1: doing a press conference this about Trump and his tariffs,

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Speaker 1: the message they will hurt us largely and directly. Couple

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Speaker 1: of things they pointed out Our trading partner's growth will

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Speaker 1: be lower and global inflation will be higher than was

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Speaker 1: forecast in December.

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Speaker 2: All of these factors create risk for the New Zealand economy.

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Speaker 2: And this happens just as we have been gathering positive

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Speaker 2: momentum and recovering from a period of high inflation and

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Speaker 2: high interest rates. Confidence has been setting higher, job growth

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Speaker 2: has been occurring, and dwelling consents have been gradually picking up.

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Speaker 3: Put.

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Speaker 2: Simply, the past week's global developments make our recovery harder.

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Speaker 2: These factors will also impact the government books, with potential

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Speaker 2: impacts for revenue, debt, inflation, and interest rates.

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Speaker 1: Stephen joyces a form of Finance minister with me tonight,

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Speaker 1: good evening.

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Speaker 3: Ending right, how are you? I'm good?

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Speaker 1: You can all always hear the disappointment in Nichola Willis's voice,

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Speaker 1: There can't you?

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Speaker 3: Absolutely and lookas has sadly been coming for a few

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Speaker 3: weeks because it became I think apparent as soon as

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Speaker 3: Trump came into office that whatever he did, it was

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Speaker 3: going to be disrupting New Zealand's economic recovery, not by

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Speaker 3: obviously intention, but by what has actually come to pass,

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Speaker 3: which is uncertainty around tariffs. Then high tariffs. Then then

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Speaker 3: you get a second order economic effect which are largely

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Speaker 3: increased inflation and reduce global growth.

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Speaker 1: How bad does it get? I mean, and does the

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Speaker 1: minister actually know yet? Does anyone actually know yet?

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Speaker 3: No? Nobody knows yet. I mean, obviously the boffins of

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Speaker 3: the Treasury will have to draw pictures on a graph,

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Speaker 3: so they have to try and their best guess. But

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Speaker 3: this is uncharted territory everybody. I don't think Donald Trump

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Speaker 3: knows to be blunt, I don't think he knows quite

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Speaker 3: where it lands and making it up every day as

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Speaker 3: he goes along. And I think that's one of the

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Speaker 3: problems is that there are two issues here. There is

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Speaker 3: the fact of the tariffs, which is detrimental in their

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Speaker 3: own right, but there's also the daily uncertainty which is

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Speaker 3: going to slow down investment around the world. And you

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Speaker 3: think about it, if you're running a factory anywhere in

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Speaker 3: the world right now, particularly in the US, China, anywhere

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Speaker 3: in Asia, and you have been planning to build a

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Speaker 3: new factory maybe to double output or something where then

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Speaker 3: you're siddenly going to sit on their hands now for

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Speaker 3: the next next few weeks to try and work out

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Speaker 3: what the hell to do next.

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Speaker 1: We're all kind of crippled by it, not just Nichola

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Speaker 1: Willis and the government, but as you say, businesses, but

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Speaker 1: even then the Reserve Bank, I mean, how do you

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Speaker 1: make decisions in an environment where you don't you literally

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Speaker 1: don't know whether inflation is going to go through the roof,

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Speaker 1: growth is going to go through the floor, or both

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Speaker 1: of those things are going to happen simultaneously.

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Speaker 3: Well, were the dueling the dueling realities? Right? So inflation

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Speaker 3: is likely to at least initially increase, but then of

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Speaker 3: course if the world economy slows down, that's likely to

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Speaker 3: reduce inflation. So you're right, people don't know the answer

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Speaker 3: that affect them. From the reserve banks point of view,

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Speaker 3: they're we cautious. I suspect it'll be interesting to see

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Speaker 3: the weather this week if they still go here with

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Speaker 3: the cut that obviously planned. They probably will, but I

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Speaker 3: don't think it's guaranteed And because they'll be sitting there

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Speaker 3: thinking it through. I think probably most central banks around

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Speaker 3: the world at the moment will continue cautiously on the

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Speaker 3: path that they've been on. But then they're going to wait.

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Speaker 3: But I think probably the biggest thing to watch for,

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Speaker 3: and I hope this isn't wish for thinking on my part,

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Speaker 3: but at some point the wider US is going to

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Speaker 3: wake up and actually curtails to some degree what's going on.

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Speaker 3: And it's been really interesting to see over the weekend

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Speaker 3: huge numbers of the Republican parties, big donors and backers

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Speaker 3: come out and say they're not signed up for this.

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Speaker 3: And I think at some point, if this volatility continues,

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Speaker 3: which is likely to it may not continue to drop

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Speaker 3: the market, say for example, the next Star too. There's

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Speaker 3: got to be some breather at some point. But if

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Speaker 3: this continues, then I would expect at some point the

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Speaker 3: US Senate will start to assert itself only because it

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Speaker 3: has to at some stage a process, and what I

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Speaker 3: mean by that is actually starting to put some pressure

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Speaker 3: on to the administration to curtail some of their wildest excesses.

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Speaker 1: Stephen Joyce, appreciate your analysis. Stephen Joyce, the former Finance

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Speaker 1: minister on the show.

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Speaker 3: For more from Hither Duplessy Allen Drive, listen live to

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Speaker 3: news talks.

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