Bahamas government warns US tariffs could impact trade and tourism

The Bahamas government on Wednesday issued a warning that the proposed 10 percent tariff by the United States on goods and services exported from Caribbean Community (CARICOM) countries “could potentially influence both trade flows and visitor arrivals.”

Prime Minister Phillip Davis, presenting the US$3.89 billion budget to Parliament, highlighted the deep economic ties between the Bahamas and the United States. “The United States remains The Bahamas’ principal trading partner, accounting for approximately 83.3 percent of our total imports in 2024, valued at an estimated five billion US dollars,” he said.

Davis also noted the significance of US visitors to the country’s tourism sector. “This longstanding economic partnership is also reflected in our tourism sector, where, in 2024, 84 percent of our stopover visitors originated from the United States.”

The warning comes in the wake of US President Donald Trump’s April announcement of sweeping new tariffs on nearly all US trading partners. Trump’s plan includes a 10 percent tariff on most Caribbean nations, while Guyana faces tariffs as high as 38 percent.

Prime Minister Davis emphasized that while the Bahamas’ close relationship with Washington has brought many benefits, it also exposes the country to economic uncertainties from the US. “Any slowdown or heightened economic uncertainty in that market can have a direct impact on Bahamian trade and tourism. This sensitivity is particularly relevant considering recent policy announcements from the United States, specifically, the proposed imposition of a 10 percent tariff on all Caribbean nations, including The Bahamas.”

He added, “Such a measure, if implemented, could potentially influence both trade flows and visitor arrivals. In this context, the government is committed to pursuing constructive dialogue with our US and CARICOM partners to address the implications of this policy shift in a manner that protects and promotes mutual economic interests.”

Ahead of the tariff announcement, the Bahamas had already been taking steps to strengthen its economic resilience. Davis pointed to the adoption of a National Trade Policy aimed at diversifying exports and reducing reliance on any single market. “At the core of these efforts is a commitment to ensuring that global trade developments do not unduly disadvantage Bahamian businesses or consumers.”

The government has also been working with the private sector to explore trade opportunities with Canada, the Dominican Republic, Ghana, and India, as well as investigating new shipping channels and logistics solutions.

Prime Minister Davis cited a practical example of trade diversification benefiting consumers: “The average price of a dozen eggs in The Bahamas currently stands at US$3.79. In comparison, during the period when eggs were primarily imported from the United States, prices soared to as much as US$10 per dozen eggs due to the devastating impact of bird flu on the American poultry industry.”

He explained that with government support, the private sector shifted sourcing to the Dominican Republic, stabilizing supply and lowering costs for Bahamian consumers.

“The fact that Bahamian consumers are paying less highlights the positive impact and strategic advantage of diversifying our trade partnerships,” Davis said, noting that the average price of eggs in Florida now stands at around US$5.60 per dozen.

The government’s proactive trade strategy aims to shield the Bahamas from the adverse effects of changing global trade policies while promoting sustainable economic growth.