Strong markets despite latest tariffs
- jerome984
- Aug 8
- 4 min read
Global markets have shown impressive resilience lately, continuing to perform strongly despite the introduction of new tariffs on 1 August. While some share valuations are sitting at relatively high levels and the headlines have been dominated by trade issues—especially the 15% tariff now affecting our wine exports—these tensions aren’t causing too much concern for most Kiwi investors at this stage.
On the home front, August is Sorted Money Month, which makes it a great time to check in on your financial well-being. This year’s theme is emergency savings. We encourage all our clients to take a moment to review their emergency savings and make sure they’ve got a solid buffer in place—just in case life throws a curveball.
Read on for more information on all of this and more.
Remember, it’s important to stay the course and to get advice before making any important financial decisions. The team here at Trilogy Financial Solutions is always here to help.
August tariffs
Markets have been a bit unsettled lately, following the latest round of tariffs announced on 1 August. Investors are weighing up the potential for rising input costs and the knock-on effect this could have on company earnings. Major sharemarket indices—including the S&P 500, Dow Jones, and Nasdaq—all took a hit, with the S&P recording its worst week since May and the Dow its worst since April.
There was a small rebound earlier this week, but overall sentiment is still cautious. Investors are keeping a close eye on how things play out—especially around economic impacts and any shifts in monetary policy. Companies with significant exposure to overseas tariffs, particularly in manufacturing and agriculture, are feeling the pressure more than most.
Even with these short-term headwinds, it’s worth noting that some share valuations remain high—especially in tech and certain growth sectors. In this environment, the fund managers we work with are sticking to a disciplined approach. They’re focused on high-quality companies with strong earnings, solid balance sheets, and sustainable business models.
Their active investment style is designed to help navigate uncertainty and take advantage of opportunities when markets move. This careful approach helps manage risk and keeps your portfolio well-positioned as the global economy continues to shift.
New Zealand’s 15% tariff
The US has recently lifted tariffs on New Zealand exports to 15%, up from the previous 10%, putting pressure on sectors like wine and red meat. This change puts Kiwi exporters at a disadvantage compared to their Australian and UK counterparts, who are still facing just a 10% rate.
The wine industry is feeling it the most—America is our biggest export market for wine (approximately a third of our wine, according to New Zealand Wine Growers), and the new tariff adds roughly $1 per bottle. That’s expected to cost the industry around $112 million in extra duties each year. Beef exports are also under strain, competing with Australian meat entering the US at lower tariffs. While dairy, machinery, and equipment exports are less affected, they’re still exposed to the tougher tariff environment.
For local investors, the direct impact is mainly limited to those with significant holdings in companies that rely heavily on affected exports—particularly listed firms in wine, red meat, and food processing. While the headline impact is meaningful for these sectors, many of the larger exporters are already diversifying into other markets or passing some of the extra costs on to US buyers, which helps soften the blow.
Smaller businesses may find it harder to adapt, but overall, this isn’t expected to cause major disruption to the broader New Zealand economy or sharemarket.
August “Money Month”
Money Month is here, bringing a timely focus on financial well-being for all New Zealanders. This August, the nationwide initiative is shining a spotlight on the value of emergency savings with its theme, “The difference is an emergency fund.” It’s a practical reminder for us all to review our financial safety nets—whether it’s starting your first emergency fund or strengthening what you already have.
Our rule of thumb is to have enough emergency savings to cover at least three months of your living costs. This gives you a solid buffer if something unexpected crops up, like losing your job, a health issue, or a big repair bill.
Having that cushion means you’re less likely to rely on high-interest debt or feel financial pressure during tough times. It also gives you the breathing room to deal with life’s curveballs without throwing your long-term plans off track.
We believe emergency funds should be kept in a safe place, with the flexibility to access it quickly, and at low cost.
We can recommend a great product for clients that want to keep their short-term money. It features no minimum monthly deposits and is taxed at your Prescribed Investor Rate (PIR), which is a maximum of 28%.
The current rates are as below (subject to change):
On call (daily compounding): 3.00% per annum
3-month term: 4.00% per annum
6-month term: 4.25% per annum
9-month term: 4.25% per annum
12-month term: 4.25% per annum
If you would like to discuss your investment portfolio, retirement planning needs, goals-based investing approach, or any other financial planning matters, please feel free to give our office a call at 09 553 8928 or email us at info@trilogyfs.co.nz.
We are always happy to help.
Sincerely,
The Team at Trilogy Financial Solutions
Disclaimer: The information in this investment update is accurate at time of writing.This investment update is for informational purposes only and should not be treated as financial advice. To the extent permitted by law, Trilogy Financial Solutions does not accept any responsibility or liability arising from the use of this information.
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