Caribbean economies are once again re-evaluating their strategies in the face of newly introduced tariffs and shifting trade relations under President Donald Trump’s administration. While the region has traditionally counted on US markets to drive growth, fresh changes to trade agreements and a renewed focus on US-based manufacturing have sparked both anxiety and adaptation among business leaders.
Reevaluating Trade Dependencies
At the Caribbean Economic Outlook Forum held in Kingston earlier this month, Derek Johnson, president of the Jamaican Chamber of Commerce, highlighted the urgent need for reduced dependence on North American imports and exports. “We’ve operated under a certain trade dynamic for years,” he remarked. “But higher tariffs on goods from key partners like Mexico and Canada inevitably ripple into our own markets, because our supply chains are more interconnected than ever.”
Johnson pointed to the renegotiation of the North American Free Trade Agreement (NAFTA) into the US-Mexico-Canada Agreement (USMCA) as a major turning point. “We often source raw materials that move through these markets before reaching the Caribbean. If costs rise in one part of the chain, we feel it here at home. Diversifying our supplier base is no longer just an option—it’s a necessity.”
Tourism Remains a Bright Spot
While the possibility of higher US tariffs poses clear challenges to Caribbean exports, some business leaders see potential in other sectors. Sasha Brown, director of the Barbados Tourism Alliance, expressed optimism that the region’s largest revenue earner—tourism—would remain robust. “Most of the current discussions around protectionist measures center on goods, not services. As long as the US economy remains strong, we can still expect a healthy flow of visitors,” she explained.
Nonetheless, Brown acknowledged potential indirect impacts. A shift in US immigration policy may reduce the Caribbean diaspora traveling back home or sending remittances. “We can’t ignore that stricter immigration controls could affect how people move—and that has consequences for our tourism and service sectors,” she added.
Energy and Manufacturing Concerns
Energy costs are another point of contention. With the Trump administration prioritizing domestic fossil fuel production and contemplating broad sanctions in Latin America, neighboring nations like Venezuela could see more disruptions—ultimately affecting the Caribbean’s fuel supply. “Countries that rely on Venezuelan imports or regional energy arrangements need to develop contingency plans,” stressed Dr. Helena Garcia, an energy consultant at the University of Trinidad and Tobago. “We’re seeing a push toward energy independence in the US, and that has a cascading effect on how we negotiate oil and gas deals in this region.”
Garcia also underscored the importance of preparing Caribbean manufacturing industries for potential knock-on costs. “If the price of raw materials fluctuates due to tariffs or sanctions, local factories might find it difficult to maintain stable pricing, ultimately affecting regional job markets.”
Environmental and Financial Repercussions
Another issue looming over Caribbean boardrooms is the future of environmental regulations and climate finance. President Trump’s withdrawal from certain global climate accords has created uncertainty for small island nations vulnerable to extreme weather events. “We rely on international funding and partnerships to bolster climate resilience efforts,” explained Rachel Sinclair, chief sustainability officer at Eastern Caribbean GreenWorks. “A weaker global commitment to climate initiatives could jeopardize both our ecological well-being and critical infrastructure investment.”
According to Sinclair, the region has adapted by turning to private-sector bonds and sustainability-linked loans. “Global rating agencies increasingly look at environmental, social, and governance (ESG) metrics when evaluating Caribbean enterprises. If US policy doesn’t prioritize climate commitments, we have to find alternative financing avenues to maintain our standing.”
Shifting Toward Self-Reliance
Despite concerns, there is a clear undercurrent of determination among Caribbean leaders. Many are turning their attention to expanding regional trade pacts, forging new partnerships in Asia, and investing in homegrown industries. The Eastern Caribbean Federation of Industries (ECFI), for example, recently launched an initiative encouraging member states to collaborate on manufacturing, agriculture, and technology development.
Katrina Lionel, ECFI’s executive director, expressed hope that this initiative would strengthen local economies. “We can’t just wait for external forces to settle. We must develop our own competitive edge in sectors like agro-processing, digital services, and logistics,” Lionel said. “By doing so, we safeguard ourselves against sudden changes in global policy and create new opportunities for growth right here in the Caribbean.”
Ultimately, as the US shifts toward a more protectionist stance, Caribbean businesses and governments alike are employing a blend of caution and innovation. Many see it as a pivotal moment to diversify, deepen regional ties, and invest in resilient sectors like tourism, green energy, and technology. While the uncertain landscape poses real risks, it also offers a chance for the Caribbean to chart a more independent economic course—one that better shields it from external shocks and fosters long-term prosperity.
