By: Staff Writer
February 4, 2025
As U.S. President Donald Trump suspends his move to impose tariffs on Canada and Mexico, businesses in The Bahamas have taken to stockpiling on certain goods in an effort to brace for a prolonged trade war.
Trump agreed to a 30-day pause on his tariff threats against Mexico and Canada as America’s two largest trading partners took steps to appease his concerns about border security and drug trafficking.
Timothy Ingraham, Chamber of Commerce president for The Bahamas, said on a local talk show on Monday that: “We know that some local businesses have stockpiled and have several months worth of inventory on hand, but obviously, if you’re talking fresh fruits, vegetables, those types of things, that’s not possible. And so there’s going to be some things where, if the tariffs go on, if they are allowed to come into effect, you will see an increase, almost immediate increase, within a week or two on the cost of certain items.”
The escalation of US tariffication could have significant consequences for the wider Caribbean and Central America.
Antigua and Barbuda’s Prime Minister, Gaston Browne, speaking on the sidelines at the recently concluded CAF Meeting in Panama, acknowledged the potential fallout. He suggested that the issue should be a major topic at this month’s CARICOM Heads of Government Meeting in Barbados.
The United States imported more than $72 billion of agricultural products from LAC from 2021-2023. Agricultural imports from Mexico predominate, accounting for $42 billion. Imports from other LAC countries with which the U.S. has free trade agreements (FTAs) totaled $15 billion over the same period (those countries include Chile, Colombia, Costa Rica, Dominical Republic, El Salvador, Guatemala, Honduras, Nicaragua, Panama, and Peru).
A new round of U.S. tariffs would certainly hurt LAC exporters if applied universally across all countries. If tariffs are targeted towards one country (for example, Mexico or China) that could create opportunities for some LAC exporters to make gains in U.S. markets. LAC countries such as Brazil or Argentina could also make significant export gains in third markets (for example, China) if their governments target the U.S. with countervailing retaliatory tariffs.
The pause in the tariffication provides a cool-down period after a tumultuous few days that put North America on the cusp of a trade war that could have crushed economic growth, caused prices to soar and ended two of the United States’ most critical partnerships.
“Proposed tariffs will be paused for at least 30 days while we work together,” Canadian Prime Minister Justin Trudeau posted Monday afternoon on X, saying that his government would name a fentanyl czar, list Mexican cartels as terrorist groups and launch a “Canada- U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering.”
The White House confirmed the pause to the United States, which followed a similar move with Mexico that allows for a period of negotiations about drug smuggling and illegal immigration.