02 May 2025

Caribbean nations are breathing easier after securing a major diplomatic and economic victory with the US’ decision to exempt the region from steep tariffs on Chinese-built ships.

The decision, which protects critical supply chains and stabilises shipping costs was announced on 17 April 2025 by the Office of the United States Trade Representative (USTR). It was confirmed that vessels operating in and around the Caribbean, including those servicing US territories, would not be subject to the newly introduced port fees on Chinese-built ships.

Initially, the tariffs, aimed at countering China’s dominance in global shipbuilding, threatened to impose surcharges of up to US$1.5mn per vessel visit on operators including those in the Caribbean.

The Caribbean Private Sector Organisation (CPSO) praised the announcement, calling it “a much-needed relief.”

“As originally proposed, the USTR fees—exceeding US$1mn for each US port call—would have increased the cost of shipping between the Caribbean and the US, with crippling consequences for inflation, shortages, delays, and other supply chain disruptions,” explained the CPSO.

The exemption followed a months-long campaign led by Caribbean leaders, private sector organisations, and industry stakeholders. Barbados Prime Minister and CARICOM Chairman, Mia Mottley had written President Trump directly on behalf of the bloc, while Antigua Port Authority CEO Darwin Telemaque, and CPSO Chairman Patrick Antoine were among the key figures lobbying US officials including Secretary of State Marco Rubio.

The USTR’s determination grants specific exemptions vital to the Caribbean economy including short sea shipping where routes under 2,000 nautical miles are exempt. Vessels under 55,000 deadweight tonnes (DWT) and fewer than 4,000 TEUs are also exempt, as well as specialised cargo ships including larger vessels carrying chemicals or energy products up to 80,000 DWT.

Tropical Shipping, a major carrier for the Caribbean, announced it had been granted an exemption, sparing its customers potential tariffs. “This is a huge victory for us and the entire Caribbean region that we serve,” said President and CEO Tim Martin, adding that “Our voices were heard.”

Seaboard Marine and King Ocean, other major regional operators, also secured an exemption. In a statement, Seaboard Marine noted that the “outcome is significant for our customers, communities, and partners across the Americas and the Caribbean.” They emphasised that the proposed policy threatened “to disrupt trade and the movement of essential goods.”

US Congresswoman Stacey Plaskett (US Virgin Islands) played a crucial advocacy role in Washington, with her strategic interventions at US Ways and Means Committee hearings helping drive the Caribbean exemption forward.

She warned that the fines could backfire on the US by pushing Caribbean nations even closer to China. “The other concern is, one that has been mentioned by my colleagues as well, is national security. We cannot have Caribbean nations moving closer to China, who is already on the shores of these Caribbean nations, to try and do increase trade with them, if we are having a trade war with China,” said Plaskett.

Industry-wide concerns had mounted globally when the Trump Administration initially proposed the tariffs under a 2023 investigation. Executives warned that fees could stack up, harming US exporters and pushing up prices for American consumers by as much as US$30bn annually. “Ships and shipping are vital to American economic security and the free flow of commerce,” acknowledged US Trade Representative Jamieson Greer.

Ultimately, Caribbean advocacy appears to have proven effective. The CPSO said that it orchestrated a coordination call with over 700 participants across industries, two regional consultations, and numerous technical submissions. “The CPSO Secretariat, under the technical leadership of Patrick Antoine and his team, played a significant role with their submissions and oral testimony,” the organisation highlighted.

Special acknowledgment was also given to regional institutions like the Caribbean Shipping Association, the Port Management Association of the Caribbean (PMAC), and the Caribbean Hotel and Tourism Association (CHTA), as well as the CARICOM Secretariat for their support.

The Trump administration’s final rule, published in the Federal Register, carved out specific exemptions for Caribbean shipping, Great Lakes operators, and vessels servicing US territories. While Chinese-built ships owned by Chinese firms will face levies of up to US$50 per net tonne (rising by US$30 annually), Caribbean-based operations will avoid the harshest impacts.

Looking ahead, CPSO Chairman Gervase Warner pledged continued vigilance in what is increasingly an uncertain global economic space. “The CPSO will continue advocating on crucial matters such as the impact of US tariffs on CARICOM trade,” he said.

With shipping lanes secured and trade flows protected—at least temporaily—the Caribbean can move forward a bit more confidently in the face of continued significant downside risks which have seen the IMF revise growth projections for the region in its latest World Economic Outlook report.

Source: Caribbean Insight – Volume 47, Issue 9