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Neutral Nations Gain Edge Amid Rising Trade Wars and Hybrid Space Models
The global space economy is undergoing a transformation driven not only by innovation but by intensifying geopolitical tensions. In this new phase, once dominated by state agencies and later private ventures, a hybrid model is taking shape—one where government security interests and commercial ambitions are closely aligned.
Rising tariffs, protectionism, and export controls are forcing space firms to rethink operations and supply chains. In response, countries like New Zealand, with their neutral trade positions and stable regulatory environment, are emerging as attractive destinations for space sector investments and operations.
New Zealand's Role in a Geopolitically Charged Space Economy
The New Zealand government is targeting a doubling of its space and advanced aviation sectors by 2030, building on the foundation of an industry that currently employs 20,000 workers and generates US$1.8 billion in revenue.
Rocket Lab, New Zealand's flagship aerospace firm founded by Peter Beck, exemplifies the country's space potential. Despite its US headquarters, Rocket Lab maintains a key launch site and a significant workforce—700 of its 2,000 employees—in New Zealand. Its acquisition of German optical firm Mynaric further illustrates its global diversification strategy.
Rocket Lab's international operations, spanning the US, Canada, Europe, and New Zealand, grant it flexibility amid shifting global trade conditions. These strategies shield firms from single-market exposure and enable growth even in volatile regulatory environments. The current US-China trade war and retaliatory tariffs have made such diversification critical.
A Deloitte report highlights the emerging trend: firms in the space ecosystem now prefer launch and satellite services in geopolitically stable or neutral countries. In Southeast Asia, Indonesia and Malaysia are already developing commercial spaceports to capitalize on this shift.
Hybrid Space Economy: Blending Commercial Growth with Security Agendas
The hybridisation of the space economy—where commercial innovation meets national defence needs—is accelerating. Space companies are increasingly aligning with government priorities, particularly in countries with rising military space budgets.
New Zealand walks a careful line between economic relations with China and its security alliance with the United States as part of the Five Eyes intelligence network. But recent geopolitical developments—including Chinese warships in the Tasman Sea and Russia's invasion of Ukraine—have pushed the country to double defence spending to 2% of GDP.
The US has started exploring satellite launches from New Zealand, and Rocket Lab is emerging as a key player in this space. The company has secured US$500 million in military satellite launch contracts, including missions for BlackSky, a US-based intelligence provider. It is also one of five companies selected for the US National Security Space Launch (NSSL) program, which could result in up to US$6 billion in Pentagon contracts.
Such partnerships underline how New Zealand can become a trusted launch and satellite hub for allied governments and private defense contractors.
Future Outlook: Investment, Neutrality, and Strategic Expansion
As space increasingly becomes a domain of strategic competition, neutral countries like New Zealand stand to gain from the diversification of global supply chains. The hybrid model allows firms to serve both commercial and defence markets, while minimizing exposure to political risk and economic sanctions.
For example, Airbus’s US$170 million military satellite investment in the UK signals how national security interests are reshaping the global space race. Firms are looking to establish operations in countries where their clients are based or in locations that offer reliable trade conditions and regulatory neutrality.
For New Zealand, this shift represents an opportunity to attract new foreign investments, not only from Rocket Lab but also from aerospace companies across the US, Japan, and the EU. The country could evolve into a launch and manufacturing hub, leveraging its political neutrality, geographic advantages, and growing domestic capabilities.
While commercial space ventures will continue to thrive, the next decade is likely to see a more hybridized, geopolitically attuned space industry—and New Zealand is well-positioned to be a cornerstone of this evolving landscape.
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