Mood of the Boardroom: Kamala Harris leads among NZ CEOs in US presidential election preference (NZ Herald)

“Harris would bring a more balanced approach due to having a more balanced team supporting her,” said one transport CEO, reflecting a widespread view that her administration would provide greater stability than Trump.

There is a shared concern among many about the broader geopolitical context in assessing the potential impact of the US elections on New Zealand. “The world requires a global and outward-looking United States,” noted the director of a major bank, reflecting a desire for the US to play a constructive role on the international stage.

A professional director echoed this sentiment, warning that “in the current period of vulnerability, the huge volatility that a Trump victory would introduce is very concerning for countries like New Zealand”.

For some, Harris is seen as the least disruptive option. “In saying Kamala Harris would be best placed as president, one is hardly giving a ringing endorsement,” says a public sector chairperson.

“Nothing she has done previously in her career suggests strong presidential material. That said, she presents less risk of blowing up the world, and more chance for steady, predictable leadership than Trump. Therefore, she has to be New Zealand’s preferred candidate.”

However, not all are convinced.

Jason Paris, One New Zealand CEO, would have preferred to see former Republican candidate Vivek Ramaswamy win the nomination and go on to win the presidency. “I don’t necessarily agree with all of his politics, but he has a clear plan,” he says.

Concerns over Trump’s trade policies

The survey highlights concerns from the boardroom over Trump’s proposed economic policies, particularly his plan for a 10% across-the-board tariff on all imports into the United States.

Trump argues that this will protect American jobs and generate revenue to offset the proposed extension of his 2017 tax cuts. He has also indicated he would impose a levy of 60% or more on Chinese imports.

Economists warn that this would likely backfire, essentially acting as a tax on US consumers and potentially adding around US$1700 ($2700) a year in additional costs.

Among New Zealand CEOs and directors, 30% say the tariff would directly impact their businesses.

This is particularly concerning given New Zealand’s growth in trade with the United States.

In 2023, bilateral trade between the two countries grew 16% to reach $14.6 billion, and saw the United States surpass Australia to become New Zealand’s second-largest export market in the year ending March 2024.

Although 65% of respondents say their business would be unaffected, many highlight the potential for indirect consequences through their clients and the broader economic climate. “This will have an impact on every business in the world because it’s seriously inflationary for the US and will therefore drive up interest rates there and globally,” says an investment boss.

An independent board member with experience across broad sectors notes, “where possible, the costs for this would need to be passed on to the (American) consumer”.

An agribusiness leader suggests “this would make the US unattractive as a market,” warning that it could cause massive instability globally. Anne Gaze, founder of Campus Link Foundation, sums up the general sentiment: “Such a policy would likely prompt us to explore alternative markets while navigating the added costs of US trade.”

Trade benefits possible with Harris

When asked whether a Harris-led US administration would open doors further for New Zealand trade, the response was divided: 28% believe it would, 26% say it would not, and 46% are unsure.

While some respondents believe Harris would be “more open to free trade” compared to Trump and “not as protectionist,” they also point out that she is relatively untested in the area of international trade.

“Compared to a Trump-Vance-led administration, she would open doors further,” says one professional director. “But compared to the current administration, I am unsure much would change.”

Business leaders emphasise the need for New Zealand to be prepared, regardless of the election outcome.

“It’s up to us to be proactive whoever gets in,” one participant said, underscoring the importance of strategic engagement with any future US administration.

With significant economic and geopolitical stakes in play, New Zealand’s business leaders are hoping for a US administration that can balance domestic priorities with global responsibilities – whoever the next president may be.

Though there is hope that a Harris administration could be more favourable to trade compared to a Trump-Vance ticket, business leaders emphasised that New Zealand needs to be proactive, regardless of the election outcome.

“It’s up to us to be proactive whoever gets in,” says Barfoot & Thompson managing director Peter Thompson.

With significant economic and geopolitical stakes in play, business leaders are hoping for a US administration that can balance domestic priorities with global responsibilities – whoever the next president turns out to be.

China and … the growth of diversification strategies

We will work hard to diversify out of China, but let’s acknowledge it’s easier said than done. CEO Despite concerns over China’s potential geopolitical moves, New Zealand businesses remain intertwined with the Chinese economy.

Prime Minister Christopher Luxon has made the case for growing New Zealand’s trade and investment opportunities offshore. That is the basis for the Government’s “China and…” approach, building the trade and economic relationship with China, but also developing new partnerships offshore, to build resilience and diversify opportunities for New Zealand businesses.

The survey results show that of those already engaged in business with China, 65% have either diversified or are planning to diversify into other markets to reduce risk. “We already have diversified market engagement, including China,” says Auckland Airport CEO, Carrie Hurihanganui. Companies are increasingly looking to regions beyond China.

OfficeMax managing director Kevin Obern notes: “Some diversification of supply is already under way – however still mostly in Asia,” while Mainfreight CEO Don Braid highlights his business’s efforts to diversify into the wider Asian region to build resilience.

“We have our own business within China, and seeing that grow is a priority. Likewise, we have diversified into the rest of the Asian region to assist our network intensity and access to other attractive country markets and opportunities.”

Similarly, the exploration of additional markets is seen as attractive. A professional director in the retail sector highlights: “We are now sourcing from India and Bangladesh in addition to China,” as part of their diversification strategy. Despite efforts to explore new markets, diversification is not without its challenges.

One CEO candidly admits: “We will work hard to diversify out of China, but let’s acknowledge it’s easier said than done.” China’s scale and growth opportunities remain unmatched, making it difficult for businesses to reduce their dependency on the country.

“China is where the growth opportunities exist,” says Cordis managing director Craig Bonnor, underscoring why businesses remain committed to the market, even as they explore alternatives.