BASSETERRE, St. Kitts – WITH the United States— the Caribbean’s primary market for food and commodities—now imposing tariffs on all countries and introducing a $1.5 million levy on ships arriving from China, regional leaders are raising concerns about the potential fallout for Caribbean economies and citizens.
On Wednesday (Apr. 2), the new U.S. tariffs came into effect, ranging from 10 to 54 percent. Economists worldwide have warned that these increases will drive up food and commodity prices, with those costs likely to be passed on to consumers.
This development is especially troubling for the Caribbean Community (CARICOM), given the region's heavy reliance on imported goods. As of 2022, the region’s annual food import bill stood at over $6 billion.
CARICOM Chair and Barbados Prime Minister Mia Mottley emphasized the vulnerability of Caribbean economies, which rely heavily on imports—most of which pass through the United States. In response to this longstanding dependency, regional leaders launched the "25 by 2025" initiative to reduce food imports by 25 percent by the year 2025.
However, due to several climate-related setbacks last year, the target has now been extended to 2030. Despite the obstacles, Mottley noted the region is making progress.
“We've already started to reap some successes, especially in the field of agriculture, for example, but we still have a long way to go," she said. "As we do this work, we have to be mindful that those recent announcements that have been made in the last few days will impact us very directly as a Region and as a Caribbean people..”
Reaffirming CARICOM’s commitment to food security, Mottley called for unity in the face of external shocks.
"This trade war and the possibility of a US $1 million to $1.5 million levy on all Chinese made ships entering US harbours will mean higher prices for all of us -- at the corner shop, higher prices at the supermarket, higher prices at the electronic store, higher prices for us at the shop, higher prices for us at the restaurant, higher prices for us at the current dealership and beyond," she added.
Despite the growing risks, many in the region have underestimated the potential impact. As imported goods flow through U.S. channels, businesses are expected to pass on the increased costs to consumers.
The issue was underscored in Basseterre, where the President of the St. Kitts-Nevis Chamber of Industry and Commerce acknowledged the looming challenge.
"I mean that could have a very, very heavy adverse impact on prices. Everything that is imported into the Federation is either -- well most things I should say -- trans-shipped through the US. So that is of significant concern to all of us and should be," said Chamber President Trevor Blake during a press conference.
Stakeholders, including shipping companies, are actively lobbying the U.S. government to reconsider or reduce the tariffs and levies. There is widespread concern that rising costs will drive up the region's inflation rate, which currently sits at around 3 percent.
The private sector organization -- the Caribbean private sector organization -- is having a major consultation on that. We at the Chamber are engaging our membership on that, so we are seeking to address that on a number of fronts. We trust that good sense will prevail, but because there's -- I don't think there's a way around it. So unless that is somewhat rolled back, it would have a very very deleterious impact on our cost of living. Because a million dollars per call, -- $1.5 million a call - is significant and those fees would have to be passed on to the importers of the goods and further passed on to the public, " explained Blake.
Prime Minister Mottley further warned that the escalating trade tensions would disrupt supply chains and drive up the cost of essential goods—such as food, clothing, and other critical commodities that the Caribbean heavily depends on.
“That means higher prices for all of us to pay, and sadly, yes, this will impact all of us, regardless of what any of our Caribbean governments will do,” Mottley said.
She added: "We could lower our tariffs to zero in CARICOM, and it will not make a lick of difference, because our economies are small and vulnerable. This crisis, my friends, will impact not only goods, but it may also have a large spillover effect on tourism.
She called for urgent collaboration across sectors to develop a regional tourism strategy in anticipation of fallout from the economic shifts in major source markets.
"We suggest that the region takes steps to sustain the tourism industry as likely worsening conditions and many of our source markets will have negative impacts on people's ability to travel. We call on our regional private sector and the tourism sector to come together and to work with governments to collaborate for an immediate tourism strategy to ensure that we maintain market share numbers as a region," noted Mottley.
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