The Caribbean is actively addressing the implications of the worse-than-expected tariffs imposed yesterday by the U.S. President. For most countries in the region, including Curaçao, the tariff rate on exports now stands at around 10%.
About a month ago, I predicted that the imposition of tariffs would have a significant impact on Curaçao. Tariffs are a form of tax applied to imports from other countries. Everything the U.S. imports is subject to these taxes, which are largely passed on to consumers, leading to higher prices (inflation) and reduced spending power.
While we were promising to lower prices, we failed to account for the looming U.S. tariff war. Now, we are faced with its reality.
According to Washington, imposing taxes on foreign goods is intended to bring back manufacturing jobs. However, manufacturing jobs are not created overnight.
What Are the Consequences for Our Region?
These tariffs represent a mix of geopolitics and trade policy, and like a double-edged sword, they are likely to backfire. A few key points stand out:
The longer these tariffs remain in place, the greater the risk of a global recession.
Although Curaçao has never exported much (non-oil) to the U.S., everything we import from the U.S. will now become more expensive.
This U.S. policy strengthens China’s influence in the Americas. Beijing is ready to fill the vacuum left by the U.S. These tariffs are seen in the region as an attack on long-time loyal neighbors.
The reduction of U.S. aid (USAID) could harm anti-narcotics efforts and fail to curb the illegal gun trade, both of which negatively impact our region.
Our situation is further complicated by the lack of unity among Caribbean nations, particularly within the Caribbean Community (CARICOM). Going it alone is not a viable option.
What Should We Do?
We must closely monitor the situation to fully assess its impact on trade and the economy. In this context, Curaçao should formally request the technical documentation of the imposed tariffs to ensure accurate analysis and response strategies.
Additionally, together with CARICOM, we should:
Seek diplomatic engagement with the U.S. administration to discuss possible exemptions or mitigations.
Develop strategies to strengthen intra-regional trade and reduce dependence on external partners.
Invest in technical assistance for local farmers and enhance the competitiveness of our industries.
Finally, we must address and eliminate the ruthless monopoly of Curaçao Ports Services (CPS), which hinders our economic resilience.
Alex David Rosaria (53) is a freelance consultant active in Asia & Pacific. He is a former Member of Parliament, Minister of Economic Affairs, State Secretary of Finance and UN Implementation Officer in Africa and Central America. He’s from Curaçao and has a MBA from the University of Iowa. (USA).
