The Trumpian Sting

By Bruce Roscoe

Importers in the United States, New Zealand’s largest market for honey, from 7 August will be required to pay import duty of 15% on the cost, insurance, and freight (CIF) value of the cargo, up from the 10% duty imposed on 2 April, according to a 1 August US tariff policy announcement. (“Duty” and “tariff” mean the same thing — a tax on imports charged by the government of the importing country.)

US imports of New Zealand honey (all types) in January-June reached 1,431.6 tonnes, an increase of 24.9% over the volume imported in CY2024 1H. The FOB (free-on-board; not including insurance and freight costs) value grew 19.5% to NZD57m, according to Statistics New Zealand. The US share of New Zealand honey exports in the half year expanded to 27.7% from 24.2% in CY2024 1H.

UMF Honey Association believes that the US market is “well-positioned to lead the industry’s recovery” and has therefore “maintained a deliberate promotional focus on this market”, Rob Chemaly, association chair, said in his report to the annual general meeting in July. Chemaly described the US as “a key growth market for mānuka honey”.

Importers can respond to new or increased duties in one, two, or three ways — pay the import duty out of their own pocket; pass the cost on to distributors in the amount needed to recover the duty they paid; demand that exporters reduce their prices in the amount needed for the importer to continue trading at the same level of profitability without increasing prices to distributors. Or importers can ask exporters to share the cost of the duty, in which case profitability reduces for both parties but the market is undisturbed as neither wholesale nor retail prices are raised. 

The duties ultimately cause inflation in two ways — prices increase when the tax is passed on to consumers and when the volume of goods in circulation decreases. That is intended, as the objective is to stimulate the production and consumption of home country goods. A McKinsey and Company survey, conducted in May after the first round of tariffs, found that more than 60% of US consumers had either changed or expected to change their spending habits.