WILLEMSTAD – The new U.S. import tariffs on goods from Canada, Mexico, and China could lead to higher costs for consumers and businesses in Curaço, potentially increasing inflation and putting economic pressure on the island.
On February 1, 2025, U.S. President Donald Trump signed three executive orders establishing new import tariffs. Canada and Mexico now face a 25 percent tariff on all imported goods, while energy exports from Canada will be subject to a 10 percent tariff. For China, an additional 10 percent tariff has been introduced, adding to existing tariffs that already reached up to 25 percent. Following negotiations with Canada and Mexico, the implementation of these tariffs was delayed by one month.
Potential Economic Impact on Curaço
Given Curaçao’s strong economic ties with the United States, these tariffs could impact several sectors on the island. Higher import costs may lead to rising prices for both consumers and businesses. Products such as electronics, vehicles, and construction materials could become more expensive, while supply chain disruptions could result in shortages for Curaçoan importers.
Local businesses are likely to face higher operational costs, affecting retail, hospitality, and the construction industry. The tourism sector could also feel the pressure if economic uncertainty and increased travel costs discourage American tourists from visiting Curaçao. Additionally, the oil industry and financial sector may experience rising expenses and shifting trade relationships, which could influence future investments.
Government Strategy and Possible Measures
The Curaçoan government is exploring various strategies to mitigate the impact of these tariffs. Diversifying suppliers by sourcing goods from Europe, Latin America, and China could reduce reliance on the U.S. Fiscal measures, such as tax incentives for businesses and reduced import duties on essential goods, may help alleviate costs. Investments in local agriculture and production could further decrease the island’s dependence on imports. Additionally, efforts to attract tourists from alternative markets and create favorable regulations for foreign investors could provide economic relief.
According to the Ministry of Finance, the effects of the U.S. tariffs may not be immediately visible but are expected to emerge gradually. In the initial months following implementation, businesses could experience rising costs and potential supply shortages. Within six to twelve months, broader economic effects such as inflation and a decline in tourism may become evident. In the long term, Curaçao may need to make structural adjustments to its trade strategies to ensure economic stability.
