NASSAU, BAHAMAS — The proposed U.S. tariff on Chinese-built vessels could severely disrupt U.S.-Caribbean trade, stakeholders from the shipping industry warned during a U.S. Trade Representative (USTR) public hearing on Monday.
The USTR is holding additional public hearings on March 24 and 26, 2025, to discuss the potential consequences of this tariff, part of a broader Section 301 investigation into China’s dominance in the maritime, logistics, and shipbuilding sectors. The hearings are being held at the U.S. International Trade Commission, located at 500 E Street SW, Washington, DC.
The tariff, which could impose fees of up to $1.5 million per port call on vessels built in China, threatens to raise shipping costs by as much as 50-60 percent. This would disrupt the flow of goods between the U.S. and the Caribbean, shifting business to foreign competitors and undermining the economic relationship that totals $92.3 billion annually.
Tim Martin, president of Tropical Shipping, which operates nine vessels built in China, testified at the hearing, emphasizing that the U.S. shipping industry serving the Caribbean “cannot absorb the additional cost” of the proposed tariff. He warned that this could pave the way for Chinese competitors to replace American shippers in the region, which would hurt U.S. exporters and Caribbean businesses alike. Martin also shared his concerns in an interview with Eyewitness News, pointing out that the tariff could lead to inflation in the Caribbean, impacting both consumers and businesses.
Rupert Roberts, president of Super Value, recently echoed these concerns to Eyewitness News, warning that the tariff could trigger a 25 percent rise in inflation, placing immense strain on the economy. He emphasized that such an increase would have far-reaching consequences for both consumers and businesses in the region.
In response to the tariff proposal, industry leaders, including Martin, are pushing for a special exemption for the Caribbean, citing the region’s unique economic dependence on U.S. imports. The Caribbean Shipowners Association (CSA) has been actively lobbying for a carve-out, referencing the Caribbean Basin Initiative (CBI) as a precedent to support their case. The CSA argues that the Caribbean’s small-scale operations should not be disproportionately impacted by the tariff.
The World Shipping Council (WSC) has also voiced strong opposition to the tariff, arguing that it would not only increase costs for U.S. exporters but also cause congestion at larger ports and reduce services at smaller ports. The WSC warns that the proposed tariff could exacerbate inefficiencies in the supply chain and negatively affect U.S. businesses, particularly those dependent on price-sensitive exports like agricultural goods.
The second public hearing on the proposed tariff will take place on Wednesday, March 26, 2025. Stakeholders are expected to continue voicing concerns about the far-reaching economic impacts of the tariff. Industry leaders are urging lawmakers to reconsider, arguing that the tariff would not only harm Caribbean economies but also American workers in port operations, warehousing, trucking, and logistics.
