
The Government unveiled a scheme within their Queen’s Speech and Coalition Agreement which could pose a direct threat to New Zealand trade relations to an unmanageable degree while overall doing nothing in their interests for reducing carbon emissions. The Bugle of Liberty writes this article alongside a piece soon to be released by our business correspondent surrounding the Capital Gains Tax backlash by Business NZ and The Bugle of Liberty believes this proves a consistent pattern by this Government showing a lack of good fiscal management and irresponsibility in the affairs of business.
“multilaterally impose carbon tariffs on nations that violate the goals and aspirations included in climate change treaties supported by New Zealand”
The Queen’s Speech
Many say that this pledge is apart of the pledges of this Government to address their shortage of any real definitive climate policy last term and takes the completely wrong approach to the issue. There are concerns that this pledge will fundamentally threaten trade in this country and will not have any of the effects it will promise.
Tariffs – Playing with New Zealanders livelihoods
Tariffs are a duty that the Government implies to all goods which come into New Zealand without exception. A Carbon Tariff therefore is something which is applied on a similar vein unless a country or company cuts their carbon emissions.
Tariff Programs inherently are an inhibitor on free trade and cause major concerns about the impacts that it will cause on the average New Zealander who will suddenly see the price of tariffs imposed on them. This furthermore comes with concerns that the application of a tariffs program invites retaliation by those we place it on which starts trade wars which leads to both nations having major additional costs paid by exporters and importers and will bring the entire economy into a state where trade is hindered and squashed. The Liberal Party has a history in standing against Tariff programs of any kind and The Bugle of Liberty has the belief that the freedom of trade and exchange is a vital freedom in the economy.
The danger of this program
This program therefore poses a unique threat and danger to New Zealand businesses and New Zealand consumers and is seemingly a direct pledge by this Government to impose tariffs on nations.
Some of New Zealand’s largest trading partners in Australia and China both fail to meet their carbon emissions pledges as outlined in many of the agreements they have signed and ratified. This means that this Government will impose tariffs inhibiting access to Chinese goods and Australian goods which come into this country unless that country “makes an effort to lower emissions”. This means that China and Australia will likely place retaliatory tariffs on New Zealand goods which will get us involved in a trade war. If New Zealand got involved with in a trade war with China, which accounts for 24% of our exports and 20% of our imports to an overall value of $8.79 billion and $7.28 billion respectively, then we would see our economy drained of economic activity and output and see a major trade war which will sink our economy into recession. We will see businesses forced to close and see the overall economic activity of New Zealand waiver. We will enter hard times near instantly and New Zealanders will feel the burden of this Government’s program directly on their wallets and in the economic headwinds. In a trade war with China, we will lose as we contribute far too little to China while China has such a large impact on us. When New Zealand contributes 0.57% of China’s overall imports while China contributes 20% of our imports while 24% of our exports go to China while 0.3% of their exports come to us, you know that is a war which will suck money out of the economy and which we will undoubtedly lose.
From there then we have Australia. Ignoring for a second the massive $10.1 billion worth of trade between our two countries, this is where we can fully understand what ramifications this will have diplomatically. This Government claims to want to support a program to expand residency rights with Australia. How do they plan to do that when they propose slapping tariffs on $4.5 billion dollars of Australian trade? This proves how this program will be devastating for our diplomatic relations and instantly invalidates one of the three key pledges by this Government in the field of Foreign Affairs and a policy which many argue was a cornerstone of Labour Party policy during the elections.
| Factors of Trade | Chinese Trade Relationship | Australian Trade Relationship |
| Net Import Value for NZ | $7.28 Billion | $4.51 Billion |
| Net Export Value for NZ | $8.79 Billion | $5.61 Billion |
This is of course only two examples of countries which will be effected. This is not considering that the United States doesn’t meet their obligations either. If we account overall for these three big trading partners, we come up with 42% of our imports being threatened and 48% of our exports being threatened as well.
This isn’t just a short-term program either, tariffs programs inherently move away business to and from New Zealand permanently. Whether it is the closure of exporters within New Zealand or the fact that potential importers take their business away from New Zealand, New Zealand loses overall.
The Actual Impact of the Carbon Tariffs
However, the Green and Labour parties might justify this by stating that these programs will have an overall effect on lowering carbon emissions and come with a clear demand. The question is, however, whether that will actually manifest and whether this will actually reduce carbon emissions.
The question is how the overall lower amount of imports and export destinations that New Zealand goods account for in these markets will be enough to justify the maintenance of these programs. If Chinese or Australian business don’t choose to just look for another country to send their goods which they’ll produce in the exact same way, they’ll likely just place tariffs back on us and expect New Zealand to yield because of the larger impact tariffs on us will have for us compared to the impact that tariffs on them will inflict on their economy. The companies and countries will still produce goods in the exact same way and this impact will do next to nothing in the hopes of trying to get them to lower emissions. The costs of moving business elsewhere or waiting for New Zealand to tap out will likely be lower than the costs of abiding not only by the tariff program but changing their production so radically as to match their goals as a nation. This means that the program is infeasible as a means actually combating emissions.
Closing Thoughts
This is a program by this Government which will quite frankly destroy our trading relationship with most of the world and deeply strain our diplomatic relationship with these countries. The Government will have to take measures therefore to either halt this program and drop the policy in which case they’ll be dropping their flagship foreign affairs policy and would have campaigned and pledged absolute lies or they’ll maintain it stubbornly and ruin the New Zealand economy.
This is apart of the overall Government’s War on Business which has been made evident by their pledges and commitments this term. They have begun a program of scapegoating all of New Zealand’s problems on businesses and are taking ill-thought actions to harm business growth and opportunity. The Bugle of Liberty plans to release a full series of articles on the topic of the War on Business with our next piece on the controversial Capital Gains Tax.
The Bugle of Liberty therefore advises, for the sake of the New Zealand economy, for the Government to drop this program and drop their policies which shows a deep lack of fiscal responsibility and economic mismanagement.
Sourav Naria-Singh, Foreign Affairs and Trade Correspondent, The Bugle of Liberty


















