By Kenton X. Chance
WASHINGTON (CMC) — St. Vincent and the Grenadines (SVG) Minister of Finance, Camillo Gonsalves, says the government is looking to broaden its tourism base to reduce the impact of the tariffs announced recently by United States President, Donald Trump.
Trump has announced far-reaching new tariffs on nearly all US trading partners ranging from a 125 per cent tax on imports from China and 20 per cent on the European Union, among others, in a move economists and other traders say is designed to dismantle much of the architecture of the global economy and trigger broader trade wars.
In the case of the Caribbean, including SVG, Trump announced a 10 per cent tariff, while in the case of Guyana, the tariff is as high as 38 per cent.
However, Governor of the Eastern Caribbean Central Bank, Timothy Antoine, said that the impact of the levy on US tourist arrivals in the Caribbean is expected to be felt later this year, into 2026.
Gonsalves and Antoine attended a meeting between the ministers of finance and central bank governors from the CARICOM and the International Monetary Fund (IMF) during the Spring Meetings, which wraps up here later on Friday.
Gonsalves told the media that the discussion was “very useful discussion, as usual”, particularly regarding the IMF’s revised economic forecast in its World Economic Outlook and the policy shifts in the United States.
He noted that the World Economic Outlook released by the IMF on Tuesday has increased the likelihood of global recession from about 25 to about 40 per cent.
“There’s still a lot of variables. We don’t know where the US administration will ultimately fall, whether they pause, whether they revise, whether they have additional trade deals, so we’re very much in flux.”
He said St. Vincent and the Grenadines and other tourist-independent countries in the Caribbean are heavily reliant on US tourism, adding that there is a strong correlation between recessions in the US and negative impacts in the region.
Gonsalves said inflation of one per cent in the United States has a direct impact of 0.5 per cent on his country’s tourism sector.
“And so we’re very, very concerned about it. What we’re trying to do is to expand our tourism base, try to get tourists from outside of the US region, to diversify. Fifty per cent of our tourists currently come from the US. We’re trying to make that less heavily dependent,” Gonsalves said.
“And of course, we’re trying to grow our economy through other fields as well, to make our economy more resilient to the ultimate declines, though, as a cyclical movement, in tourism activity.”
Gonsalves noted that revised economic forecasts are predicted to impact the Caribbean region.
“So we had a discussion about their analysis of the impact and what we believe as the Caribbean constituency, the fund can do to improve their relationship with the Caribbean region, to support us in light of what will likely be negative impacts and to chart a way forward,” the Finance Minister said.
He noted that a lot of Caribbean countries are “not massive exporters to the United States.
“Our economies are increasingly evolving towards services. However, the United States still remains the dominant point of contact for our imports, not only of American goods but goods from Latin America and goods from Europe; goods from further afield.”
Gonsalves said that the Mexican fruits and vegetables consumed in the Caribbean come through Miami, as is the case with Brazilian or Argentinian beef and European products.
“And if a tariff is slapped on all of those products before they are on-shipped to the Caribbean, it will have an inflationary impact, It will have a negative impact on growth.”
He said the Caribbean has to accelerate regional integration, improve trade between and among its islands, and revise the logistical arrangements of how goods get into the region.
“Miami has been a convenient port of contact, but maybe it’s time for us to look at the improved port facilities in Jamaica, in Trinidad and Tobago, and outside of CARICOM in the Dominican Republic, where maybe we can start to bring some of those goods into our region without them receiving the US tariff. These are important things that we have to analyse urgently.”
Antoine made a similar call to the media for the Caribbean to relook Miami as its shipping hub and Gonsalves said that individual countries are meeting with US trade officials.
“St Vincent and the Grenadines has a meeting. I just spoke to other countries in the room that have meetings scheduled with various US trade officials, so we are making repeated demarches,” he said.
He said the Organisation of Eastern Caribbean States (OECS) is going to have a separate group encounter with US foreign affairs and trade officials in the coming weeks.
“And we’re going to make our case, but we are cognizant of the headwinds that we’re facing in this regard,” Gonsalves added.
Another stupid news article, which doesn’t bring no one out of poverty. Ralph Gonsalves is an asshole. He is a white man who is hellbent on being the ruler of this country. Keeping the people down. Our bachelor degrees are your passport to stupidity.
Not a word about reducing imports of food by increasing production of food. We are insistent on expanding tourism while it’s clear that folks tend to reduce travel in times of recession. But man must eat. We also hear of finding an alternative port to ship to the Caribbean instead of Miami but not a word about increasing intra Caribbean trade. We seem to not grasp the importance of first of all, striving for food security. The Caribbean should not have to import most of what it consumes when we have all the factors of production.