BASSETERRE, St. Kitts – THE International Monetary Fund (IMF) has cautioned that territories heavily dependent on the United States could be significantly affected by the ongoing tariff wars between the United States, Canada, Mexico, and China.
The government of St. Kitts and Nevis is also anticipating some level of impact from the broad tariff impositions, following the U.S. decision to impose a 25 percent tariff on imports from Mexico and Canada and an additional 10 percent on Chinese goods.
IMF Director of Communication Julie Kozack, responding to an SKNVibes News question at a press conference in Washington, D.C., noted the potential consequences of the tariffs.
“What I can say today is that if sustained, the impact of the U.S. tariffs on Canada and Mexico can be expected to have a significant adverse economic impact on those countries given their very strong integration and exposure to the U.S. market,” Kozack stated.
Although the Donald Trump administration has imposed tariffs, it has also expanded exemptions for certain goods from Mexico and Canada. On Thursday (Mar. 6), the President signed an order exempting some goods from taxation which fall under the North American Free Trade Agreement (NAFTA), according to reports from Washington, D.C.
In Basseterre, Foreign Affairs Minister Dr. Denzil Douglas acknowledged the potential effects on St. Kitts and Nevis, explaining that the country could face indirect repercussions due to its trade relationships with the U.S.
“For example, most of our goods come through ports like Miami, St. Thomas, and of course New York, etc. What it means therefore is that it is expected for us to pay higher prices for the goods that have been imported through any port, or from ports of origin where increased tariffs would have been placed by the announcements made by President Trump within 100 days of taking office, for a second time in the history of the United States,” Dr. Douglas said.
This concern arises at a time when the Federation is already experiencing rising prices and shipping challenges stemming from the COVID-19 pandemic. Dr. Douglas highlighted that supply chain disruptions caused by the pandemic have led to longer shipping times and increased costs.
“...there has been disruption in the supply trade routes as a result of shortages from COVID, and now we are going to experience, I would think, maybe longer periods for goods to arrive, the cost of these goods would go up, and then of course it will impact negatively on the cost of living for our people here in St. Kitts. The good thing about it is that the entire world is responding to what has been announced by the President of the United States in terms of increased tariffs,” he explained.
However, Dr. Douglas noted that the global community is responding to the U.S. tariff hikes, with countries like Canada pushing back.
"In fact, as a result, I believe of Canada's reaction, we've heard only a few nights ago that he has suspended the application of the increased tariff against Canadian goods by a month, and maybe that could be extended further because the Canadian government has indicated that its citizens will not be the ones to suffer, but the Americans themselves will suffer, and so that's the way it is," Dr Douglas added.
Dr. Douglas also pointed out that while St. Kitts and Nevis’ contribution to international trade is relatively small, some industries—such as electronic assembly—still export goods to the U.S.
