Published by Neil Hartnell, The Tribune News, February 3rd, 2025
Donald Trump’s decision to levy tariffs on Chinese, Canadian and Mexican imports is “definitely very bad news” for Bahamians as it will likely increase prices for multiple goods, businesses warned yesterday.
The Bahamas Chamber of Commerce and Employers Confederation (BCCEC), in a statement responding to Tribune Business inquiries, said it harbours “deep concern” over the US president’s move to ignite a trade war given that it will may once again worsen the inflation and cost of living crisis that many Bahamian families are “already struggling with”.
The Bahamas, which imports virtually all the physical goods it consumes and has limited domestic production capacity, is especially vulnerable to the imposition of tariffs that Mr Trump first threatened during his election campaign. Many Chinese-origin good, in particular, which come to The Bahamas transit the US, as well as the Canadian and Mexican variety, thus exposing them to US taxes due to take effect tomorrow.
The Chamber, in a statement issued via its chief executive, Dr Leo Rolle, told this newspaper: “The BCCEC notes with deep concern the US government’s application of tariffs on goods from China, Mexico and Canada, and the tariffs applied by those countries in response.
“Given that the US is by far our largest trading partner, these tariffs have the potential to seriously impact the cost of some goods which are imported. The extent to which we will be impacted depends on the level of goods imported from the US which emanate from the countries on which tariffs have been applied.
“News reports indicate that the classes of goods likely to be most impacted include clothing, some agricultural products, electronics and spirits. It is very possible that we will see higher prices on these products in the coming months if the trade wars are allowed to proceed,” the Chamber continued.
“With Bahamians already struggling with inflation and the high cost of living, this is definitely very bad news. Anecdotal reports also suggest that US agricultural may also be negatively impacted by their new immigration policy, which may impact products grown in the US, further exacerbating the situation.”
The Trump administration’s aggressive illegal migrant deportation drive, which is touted as largely focusing on those with criminal convictions and records, may also sweep up, drive away and return the foreign labour upon which many US farmers rely. If this results in a loss of productivity and reduced supplies, it could drive up the costs of Bahamian food imports from the US.
To mitigate the fall-out, the Chamber reiterated: “The BCCEC has been working to identify other possible import markets which would allow Bahamian merchants to circumvent US middlemen and help bring down the cost of living, even prior to the implementation of these tariffs.
“We are also keen to see the development of local industries to reduce the reliance on external providers, especially with regard to food products. This will take a serious commitment from the Government and local producers.
“In recent months, the Government - through the Bahamas Trade Commission - has been working to identify alternative markets from which certain goods can be imported. The BCCEC is also working to assist its members connect with providers all over the globe. Our members in the logistics and cargo businesses stand ready to assist with access to new markets.
“It is our hope that the results of this work can be used to help make the necessary market connections. In any event, we will continue to monitor this developing situation and provide what ever assistance we can.”
Mr Trump at the weekend signed executive orders imposing 25 percent tariffs, which act as a levy or tax on goods as they come through the border, on all Canadian and Mexican imports despite the free trade zone agreement between those two nations and the US which was signed during his first presidency. In addition, Chinese imports face a 10 percent tariff, which all these measures due to take effect tomorrow.
Canadian energy exports to the US face a lower 10 percent tariff. But, amid fears that Mr Trump’s actions could be the spark that ignites a wider global trade war, with the European Union (EU) thought to be in his sights next, Ottawa has pledged to retaliate with 25 percent tariffs of his own on $20bn worth of US imports including tobacco, produce, household appliances, firearms and military gear.
And, if the situation does not calm down and gets resolved within the next 21 days, Canada is also preparing for a second, broader round of retaliatory tariffs that will target another $86bn worth of US imports. Mexico, meanwhile, is set to announce its own retaliatory tariffs on US imports today, while China is planning legal action over what it alleges is a violation of World Trade Organisation (WTO) rules.
Mark A. Turnquest, a corporate consultant and founder of the 242 Small Small Business Association and Resource Centre, previously told Tribune Business that The Bahamas could be plunged back into a renewed cost of living crisis if the US president-elect follows through on his pledge because this nation imports such a high quantity of Chinese manufactured products.
He estimated to this newspaper that “at least 60-70 percent” of products sold locally come from China “directly and indirectly” with a big portion transiting, or passing through, the US. Besides those that arrive on the US west coast, and are trucked cross-country to eastern ports, Chinese goods also transit the Freeport Container Port heading to the US before being returned to The Bahamas.
Mr Turnquest argued: “We have to bypass America and get goods directly from China.... We know there will be a reawakening of the shipping crisis we had a couple of years ago after COVID, but this will be done in the form of tariffs. We know when you tax one thing, you then have to tax another thing and then another thing.
“It will be a downward spiral with extra costs and fees,” he warned of the likely Bahamian impact from Mr Trump’s plans. “We are watching and hoping. We are very, very concerned and we don’t want this to happen. We cannot afford any type of extra inflationary impact with tariffs tacked on because we are already trying to control all sorts of extra costs.
“We are trying to continue to operate and all types of stuff. We don’t need an extra burden. We’re not concerned about Amazon in the short-run, but we are very concerned in the short-run because January 20 is coming and this means we are very concerned about the tariff strategy of Donald Trump,” Mr Turnquest continued.
“It’s going to be detrimental to our businesses. This is a death blow if the Trump tariff strategy is executed. We cannot take that. We cannot cover that extra burden. We just can’t. We hope they take that into consideration.”
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