Trump & Asia 2026 : Implications for NZ

When Donald Trump was inaugurated for his second term in January 2025, many governments across Asia anticipated his administration would strengthen the region's security against China while pursuing predictable, if transactional, trade policies. Leaders remembered how countries like Japan had successfully managed relations during Trump's first presidency and felt confident they could do so again.

They were mistaken. Throughout 2025, the Trump administration's approach disrupted economics, as well as trade and security arrangements across the Asia-Pacific more dramatically than any American administration in decades.

In 2026, that situation looks set to continue.  

The Tariff Shock

The most direct impact on New Zealand has come via Trump's controversial tariff regime. In April 2025, Washington dropped a 10 percent "universal tariff" on virtually all imports, including those from New Zealand. By August, this had increased to 15 percent for most Kiwi exports—a rate calculated using a controversial method based on trade deficits, rather than actual tariff levels.

The Ministry of Foreign Affairs and Trade has been working to help exporters navigate the new reality, where meat, wine, dairy products and other key NZ exports face significantly higher barriers to our second-largest export market. Wine exporters have been particularly hard hit, with the tariff on a bottle increasing from less than 10 cents to more than a dollar.

Trade Minister Todd McClay has maintained that New Zealand won't impose retaliatory tariffs, arguing such measures will only hurt Kiwi consumers and businesses.

Donald Trump announces tariffs on "Liberation Day" - April 2nd 2025. / Image US govt

A Region in Flux

Across Asia, the pattern has been similar. The White House imposed waves of tariffs on both allies and adversaries, disrupting supply chains and trade flows throughout a region that includes the world's largest free trade zone and some of the biggest exporting nations. Major traders like Vietnam and Japan have struggled with Washington's insistence that bilateral trade deficits somehow prove other countries are exploiting America or the American consumer.

This unpredictability coming from Washington has perhaps been more damaging than the tariffs themselves. Manufacturing and services firms across Asia have found it nearly impossible to plan, with tariff rates changing frequently and with minimal warning. This has led many trading economies to seek new partners beyond the United States—including, ironically, China.

The year-long trade war between Washington and Beijing ended with what many observers saw as the United States essentially backing down, after China demonstrated it could withstand the economic pressure created by American tariffs.

Trump is due in Beijing in April, but its somewhat unclear at this stage what progress can be made on the trade tariff front. Chinese leader Xi Jinping seems happy to play the long game, while being very clear China will not bend to Washington’s will.

This week the White House announced a new 25% tariff on any country that does business with Iran - and China is Tehran's biggest trading partner. Beijing has signaled it may look to retaliate against this US move.

Trump's last conversation with Xi ended with an agreement to lower tariffs on Chinese imports, while China suspended controls on the export of rare earths – the critical minerals needed to manufacture smartphones, electric cars and military equipment like fighter jets. New tariffs targeting China-Iran trade look likely to complicate matters.

Security Uncertainty

The Trump administration's approach to regional security has also created concern in Asian capitals. By dissolving the United States Agency for International Development and shutting down outlets like Radio Free Asia, the White House was widely criticised for undermining America’s hard-won soft power across the region.

For New Zealand, which has been increasing defence spending and participation in regional exercises like Talisman Sabre 2025, these developments have complicated an already delicate balancing act. The country has long maintained both a security alignment with Washington and deep economic ties with Beijing—a position which requires significant diplomatic skill to sustain.

New Zealand Army vehicles, including Light Armoured Vehicles assemble at Wellington’s CentrePort before departing for Exercise Talisman Sabre in Australia/ Image : NZDF

In late November 2025, Trump spoke to Xi Jinping again by phone. Following the call, Trump reportedly cautioned the new Japanese Prime Minister Sanae Takaichi to tone down her comments about defending Taiwan – fuelling speculation in some parts of the US media that Washington may well drop its stated support for Taiwan in exchange for a major trade deal with China.

Meanwhile the White House has spent the early part of 2026 involved in several significant international moves – the seizure of the Venezuelan leader Nicholas Maduro, the moves to somehow take control of Greenland, and even suggestions of impending US military interventions in Cuba and Iran. It’s a confused picture to say the least.

Pacific Pressures

For New Zealand, the implications extend beyond bilateral relations with Washington. Recent announcements from the Trump administration have disrupted much of the goodwill built up over the past half-decade of US re-engagement in the Pacific, with immediate impacts including local job losses. Civil society organisations that relied heavily on USAID funding are actively seeking alternative sources to continue their work, and many local employees on these projects are facing job uncertainty.

Pacific Island leaders have also been watching nervously as America withdraws from climate agreements, pauses foreign assistance, and implements trade policies that seem to prioritise short-term American interests over long-term partnerships. Many in the region reportedly now see the administration's combination of these actions as an inconsistency that makes it easy for China to promote itself as a reliable partner.

This puts New Zealand in an increasingly difficult position. As a Pacific nation with special responsibilities and relationships throughout the region, we face some pressure to fill gaps left by American withdrawal. Yet resources are limited, the economy is not in the greatest health, and Kiwi public sentiment toward the Trump administration appears decidedly negative.

Across several polls in 2024-25, most New Zealanders held a negative view of Donald Trump. A Talbot Mills poll found that 62% of respondents disapproved of his job as president, compared to 30% who approved (a net -32 approval rating). Similarly, an RNZ-Reid Research poll indicated that 44.4% of voters felt his presidency had been bad for New Zealand, while only 8.9% supported it.

The Diplomat recently noted that given the New Zealand public antipathy toward the Trump administration and its "America First" policies, the debate over whether to join AUKUS Pillar II—focused on advanced defence technology cooperation—has the potential to become a bigger issue in Australasia, as questions mount about American reliability.

Economic Realignment

Beyond direct trade impacts, Trump's policies are reshaping global economic relationships in Asia, in ways that could prove lasting. The International Monetary Fund warns that growth across the Asia-Pacific will slow in 2026, in part due to American policy, while consumer demand will remain stagnant due to uncertainty about the global economic environment.

However, there are some potential silver linings. New Zealand's technology sector could benefit from reduced US demand for Chinese products, while meat exporters are likely to gain if high tariffs on Brazilian imports go ahead as planned.

Regional trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)—which notably excludes the United States—seem likely to become more important as countries consider diversifying from American markets.

 Political Consequences

Australia and New Zealand remain central to US defence strategy in the Western Pacific, with consistent strategy through the Biden and Trump administrations aimed at deterring China's expanding reach. Yet the Trump administration's trade policy toward both countries has threatened these normally solid alliances. New Zealand is undertaking a significant "foreign policy reset" to balance traditional alliances with deepened engagement in Asia, particularly Southeast Asia, India (with an FTA in the offing), and North Asia, while also maintaining its Pacific focus.

Trade Minister Todd McLay pictured with India's Commerce & Industry Minister Piyush Goyal, following the successful FTA negotiations/ Image supplied

In Australia, the Labor Party was re-elected in May 2025 whilst openly questioning Trump’s foreign policy. Latest polls show Australians want to stick with the US alliance, despite continuing to hold overwhelmingly negative views towards the Trump administration and harbouring deep worries about the erosion of American democracy.

Support for the Autocrats

Also troubling for regional stability has been the administration's apparent support for some of Asia's most repressive regimes.

In Myanmar, US Secretary of Homeland Security Kristi Noem recently suggested that military-led elections might be free and fair, despite nearly all impartial observers calling them a propaganda exercise. By legitimising the military rulers, the United States can be seen as tacitly supporting the regime, even as roughly half of Myanmar lives in poverty, and the country has become a hub of organised cyber-crime, disease, and refugee flows that affect neighbouring states.

A similar shift is occurring with Cambodia, where the White House has reset relations with Phnom Penh's autocratic regime despite its tolerance of cyber-scam centres that target citizens in developed countries across the region - including Australia and New Zealand.

A New Year

As 2026 kicks off, there are few signs the Trump administration will change course. Its latest adventure in Venezuela indicates Washington’s desire to hark back to the 19th century, where great powers ran their own “sphere of influence” for their own benefit. It’s a mode of thinking that already holds some sway in Beijing, and the implications are yet to be fully realised.

On trade, the White House shows no desire to back away from its aggressive tariff strategy, despite damage to America's domestic economy that threatens to undermine the Republican electoral prospects in this year’s Mid-Term Elections.

For New Zealand, now is the time to position as honest brokers, to strengthen partnerships with Asian and Pacific countries through organisations like ASEAN and the Pacific Islands Forum, and to champion the international agreements and rules-based international order that has served small, trade-dependent nations like ours so well.

The question facing New Zealand in 2026 is not whether we can avoid the impacts of American policy in our region, the question is whether we can navigate these challenges while protecting our economic interests and maintaining the international relationships that matter most to New Zealand’s future.

Opinions expressed are those of the author.

Asia Media Centre