What This Means for the Caribbean

  • Tariffs could raise the cost of U.S. imports, affecting food, medicine, and everyday goods.
  • Shipping costs may double due to the new US$1.5M fee on Chinese-built vessels.
  • Trade partnerships may shift, with Caribbean nations exploring new links with South America.

A sweeping tariff policy proposed by US President Donald Trump starting with a baseline 10% tariff on all imports into the United States is triggering alarm among Caribbean trading partners like Antigua and Barbuda, where both imports and exports are deeply tied to the US market.

Darwin Telemaque, CEO of the Antigua and Barbuda Port Authority, says the new tariffs could have far-reaching consequences for the local economy particularly through increased import costs and diminished trade competitiveness.

If enacted, the move could significantly affect import prices, trigger higher inflation, and possibly disrupt shipping routes that are essential to getting goods into Caribbean ports.

“If you had no tariffs, going into a market and tariffs are applied now, that impacts on competitiveness.  And for markets that are not necessarily very strong in exports, any tariff that would challenge that or reduce it in any which way is a significant concern,” Telemaque warned.

Many goods consumed in Antigua and Barbuda are sourced from Europe and Asia but pass through the US before arriving on local shelves. With the US planning to apply tariffs at entry points, the cost of these re-exported goods could rise significantly by the time they reach the Caribbean. That could spell increases in the price of food, consumer goods, electronics, and even construction materials. With high inflation already squeezing household budgets, and many Caribbean countries still recovering from the effects of the COVID-19 pandemic, the added cost burden could push some families and small businesses over the edge.

List of countries to be impacted by US tariffs

To cushion the impact, Telemaque suggested that governments could temporarily freeze the CIF (Cost, Insurance, and Freight) values on imported goods, similar to what was done in Guyana during the pandemic.

On the export side, Antigua and Barbuda could also face serious barriers. The country currently enjoys tariff-free access to the US market under trade frameworks like the Caribbean Basin Initiative (CBI) and Caribbean Basin Economic Recovery Act of 1983 (CBERA).

“The U.S. government has changed their posture and what we would now have to look at is how we could  contend with that change by  improving productivity,  finding ways to minimize  cost of what we’re producing so that when we export it we can  hopefully increase costs for exports through the United States,” Telemaque explained.

And that’s not all. The US is also considering an additional charge of up to US$1.5 million on Chinese-built ships docking at American ports. Since many Caribbean-bound imports are shipped using Chinese-manufactured vessels, this added cost could further inflate prices and disrupt the supply chain.

Shipping Companies Also Under Pressure

One of the biggest red flags in Trump’s proposal is the massive port fee that would be charged to any ship built in China entering U.S. ports. This includes many of the vessels operated by Tropical Shipping, a Florida-based company that delivers 55% of Antigua and Barbuda’s cargo.

Tim Martin, President of Tropical Shipping, has publicly urged U.S. trade officials to reconsider. “The U.S. shipping industry serving the Caribbean cannot absorb the additional costs of the proposed port fees, which would have significant economic consequences,” Martin testified.

Tropical Shipping operates out of the Port of Palm Beach, Fla., and nine of its 19 vessels were built in China up to 25 years ago. It transports vital supplies such as food, building materials, medical provisions, and hurricane relief items. He said instead of strengthening American competitiveness, these port fees would push American-owned carriers like Tropical out of business.

Martin explained that the imposition of such a high port fee on Chinese-built vessels would force his company to double its freight rates with an average increase of $2,500 USD per 40′ container. “An increase of this magnitude would be catastrophic for American exporters and Caribbean consumers,” he cautioned.

Trade Relationships at Risk

Antigua and Barbuda’s Prime Minister Gaston Browne, who also serves as Minister of Finance, has warned that the country could see inflation reach as high as 14 percent if the U.S. moves forward without considering the unique vulnerabilities of Caribbean economies.

There is also the possibility that if U.S. shipping companies like Tropical become uncompetitive, it could open the door for Chinese and South American vessels to dominate Caribbean trade routes, shifting the geopolitical balance in the region.

“Lots are at stake here,” Telemaque said “and I’m hoping that, that second decision by the US government, which is supposed to take effect on  April  17th, they would have had a change of heart and rethink that” … “The combination of those things would be very painful.”

Regionally, CARICOM is stepping up diplomatic efforts to engage the Trump administration. Barbados Prime Minister Mia Mottley, who currently chairs CARICOM, is expected to write to President Trump, requesting exemptions for the Caribbean under the existing trade agreements.

At home, Antigua and Barbuda is exploring alternative trade relationships, including with South American countries like Brazil, to lessen dependence on the US. ports and supply chains.