WILLEMSTAD – The Central Bank of Curaçao and Sint Maarten (CBCS) is sounding the alarm over the potential economic fallout from new U.S. trade tariffs, warning that both islands could face rising inflation, reduced tourism, and slower economic growth. The warning comes in a detailed report released this month analyzing the likely impact of tariffs recently announced by U.S. President Donald Trump.
On April 2, 2025, the Trump administration announced a 10% baseline tariff on all U.S. imports, with even higher tariffs for imports from the European Union (20%) and China (34%), a move branded “Liberation Day” by the U.S. government. These measures, aimed at protecting U.S. industries and correcting trade imbalances, have prompted retaliatory threats from major trading partners and raised fears of a full-scale global trade war.
Heavy Exposure to the U.S. Market
The CBCS notes that both Curaçao and Sint Maarten are heavily dependent on the U.S. for trade, particularly imports. Between 2019 and 2023, over 50% of Curaçao’s imports came from the U.S., while more than 45% of Sint Maarten’s imports originated there. Additionally, the U.S. remains a vital tourism market, especially for Sint Maarten, where over 54% of exports of goods and services are tied to the American economy.
Inflation and Tourism at Risk
According to the CBCS analysis, the U.S. tariffs will lead to higher prices for American goods—costs that will be passed on to Curaçao and Sint Maarten through imports. This “imported inflation” is expected to erode household purchasing power and reduce consumer spending, particularly in sectors like tourism and retail.
If the U.S. trade measures remain unilateral (without retaliation), Curaçao’s economy is projected to slow from 3.2% to 2.9% growth in 2025, with inflation rising from 2.3% to 2.9%. In Sint Maarten, the impact is more severe: projected GDP growth drops from 2.6% to 2.1%, and inflation increases by half a percentage point.
If a global trade war erupts due to retaliatory measures from countries like China or the EU, the CBCS forecasts even more dramatic effects. Curaçao’s growth could fall to 2.6%, and inflation spike to 3.5%. Sint Maarten could see growth slump to 1.8%, with inflation jumping by a full percentage point.
Balance of Payments Pressure
Both shock scenarios foresee a worsening of the current account deficit for the monetary union. Under the trade war scenario, the deficit could reach 14.1% of GDP in 2025, with foreign reserves dropping sharply, reducing import coverage to just over three months by 2028.
CBCS Recommendations
To mitigate the fallout, the CBCS urges businesses and policymakers in both countries to:
Diversify trade partners, particularly in Latin America and the Caribbean.
Promote local production in agriculture, manufacturing, and renewable energy to reduce dependency on imports.
Strengthen regional alliances, such as CARICOM, to advocate for the Caribbean’s interests in global trade discussions.
The CBCS warns that without a strategic shift, the islands’ economies could suffer long-term damage from global protectionist trends.
A revised medium-term economic forecast is expected in the CBCS Economic Bulletin of June 2025.
