A short-term boost to the New Zealand dairy sector is possible as the US-China trade war escalates, but the industry is predicting long term pain.

Photo: RNZ / Rebekah Parsons-King

The administration of US President Donald Trump fired the first shot on Friday, putting tariffs on $34 billion worth of Chinese goods, provoking Beijing to do likewise.

Mr Trump has threatened to impose more tariffs.

Dairy Companies Association chairman Malcolm Bailey said the fear was the trade war could easily lead to a global depression as affected countries seek to dump exports into other markets.

"In the short term it is possible New Zealand could get a boost."

"But we think the boost would be very temporary because economic activity overall will be depressed. Everyone ends up losing out of this," Mr Bailey said.

New Zealand Beef and Lamb chief executive Sam McIvor said the industry was not panicking yet.

Mr McIvor said the growing dispute put greater emphasis on free trade deals like the Comprehensive and Progressive Trans Pacific Partnership and the upcoming negotiations with the European Union.

"If you have markets that are open to you, then you actually have choice, you have flexibility to deal with global changes."