Chinese President Xi Jinping. Photo / Greg Bowker
When elephants "dance" it is the grass that suffers.
The African proverb means that it is the weak that get hurt in conflicts between the powerful.
The US-China trade war is one such fight that — while New Zealand may be a nimble free-trader — will have an impact on global business.
A suite of issues sparked by Donald Trump's quest to put "America First" and push China back into "its place" is also sapping business confidence here.
"The world rather than the NZ Government should be everyone's concern," says a leading banker.
"The dollar and looming trade wars between the superpowers and political uncertainty in Britain and Australia are all watch points.
"New Zealand is a trading nation and anything that impacts global trade is likely to be adverse for NZ."
Agribusiness exporters are also nervous that it is actions by the United States — which used to take a lead in global trade — that are causing trade dislocation and potentially dampening global economic growth.
It goes further.
Says former Reserve Bank Governor Don Brash, "The combination of highly damaging US trade policies, potentially severe problems in Europe (think Brexit and the Italian political situation), considerable stress in developing economies such as Turkey, Argentina, and South Africa, and high levels of debt (particularly public sector debt) in many countries is a dangerous situation."
In mid-September, Donald Trump, emboldened by America's economic strength and China's economic slowdown, upped the stakes in his trade war with Chinese President Xi Jinping.
Not only were tariffs on US$200 billion of goods foreshadowed but Trump indicated he was prepared to tax all imports.
New Zealand cannot ignore the United States' brinksmanship — NZ already faces US tariffs on steel and aluminium exports. "While there are positive opportunities for all businesses I am involved in — one can't help be tempered in looking ahead by external risks as if they eventuate it will have a negative impact on a range of businesses in New Zealand and elsewhere," said a company director.
"There are risks to the economy globally — Brexit, Donald Trump's approach on various issues including protectionism and his trade war with China.
"Locally the ongoing loss of business confidence and concerns about whether we are heading into tougher times does make business more cautious about investment. NZ businesses' response to these influences is entirely logical and responsible."
"Protectionism and the US/China trade war are the most pre-occupying global issues at present — they impact directly on market stability and commodity prices," said the NZ International Business Forum's Stephen Jacobi.
From the global trade frontlines:
● "The USA in particular is a very strange place to be operating at the moment. It feels like we are in the middle of an All Black / South Africa scrum.
"Huge pressure on both sides of the economic equation (growth or decline), hoping there is a clear winner, not a collapse" — tourism boss.
● "With the geopolitical situation being as volatile and unpredictable as it is today, we need to be on top of what opportunities and threats are created from the environment" — shipping boss.
Many report the impact on local businesses will be to force a more conservative approach.
Some are optimistic NZ's continuing economic growth will slowly shift to exports following emerging late cycle constraints in the booming construction sector.
They are pinning their hopes on NZ's pivot to Asian consumers as a bulwark for our export volumes and prices — particularly as Xi continues to advocate against protectionism.
"Given the importance of NZ's exports to our economy, this is something that needs to be watched closely over the next 12-18 months. Shipping lines are still delivering poor financial results and will continue to see major cost increases (particularly post 2020) and these costs will impact NZ exporters and importers," warned a shipping boss.
When it comes to the importance of trade, New Zealanders could also be in for a lesson.
"I think New Zealanders will receive a timely reminder about global trade and the importance of exports, rather than single-use plastic bags, when a tariff issue punches us in the face," said an energy boss. "They might even appreciate Fonterra's role in all of this also.
"Most of the New Zealand economy doesn't deal with the tough competitive dynamics of global business, and so it's good for everyone to think a little more than outside their suburb from time to time."