Barbados and other CARICOM countries trading with the United States (US) are at risk of missing out on $1.08 billion in export revenue if the US pursues its reciprocal tariff regime.
The potential sectoral fallout would be felt mostly in based metals and articles thereof ($311.8 million), hides, textiles and apparel ($205.6 million), agriculture and food ($203 million), and chemicals ($124.2 million).
Regional private sector representatives are particularly concerned about the negative implications the tariffs, which were announced by US President Donald Trump in April but subsequently delayed, have for duty free market access under the Caribbean Basin Initiative (CBI) arrangements.
CARICOM Private Sector Organisation (CPSO) chief executive officer and technical director Dr. Patrick Antoine voiced concern about the US tariff effects on the region during a recent Private Sector Organisation of Jamaica-CPSO Business Breakfast Forum at Sandals Montego Bay, Jamaica.
He advocated for a CBI-Plus strategy to safeguard products outside the existing CBI preference regime.
The CPSO elaborates on its concerns and has made recommendations in a submission to the US Trade Representative’s (USTR) Biennial Review of Country Eligibility for Benefits under the Caribbean Basin Initiative for Calendar Year 2025.
A July 16 notice in the US Federal Register said the USTR’s office “has to submit a report to Congress regarding the operation of the CBI) on or before December 31”.
In its 17-page comment to the USTR, the CPSO, which represents more than 7 500 firms, voiced concerned that except for a limited number of exempted tariff lines, the US reciprocal tariffs “have effectively neutralised the preferential margin previously enjoyed under the CBI framework”.
An assessment from a CARICOM Experts Working Group comprising the CARICOM Secretariat, CPSO, Caribbean Development Bank, and World Bank, estimated that “the recent shift toward a US reciprocal tariff regime introduces severe risk to CARICOM’s agri-export trajectory”.
The CPSO analysis found that the potential export revenue loss to the region is $1.08 billion. Experts concluded that some leading agricultural products which qualify for duty-free access under CBI are exposed to the reciprocal tariff.
Frozen Rock Lobsters saw an export increase of $37.8 million from 2023 to 2024 but now face a projected loss of $55.6 million due to new tariffs. Cane Molasses, also showing growth, is exposed to $6.2 million in losses, the CPSO noted.
The organisation told the USTR that the CBI “remains essential to the mutual trade, commercial, and economic interests of both the US and CARICOM”.
“The trade and economic symbiosis that has developed under the CBI, reflected in sourcing, logistics, shipping, and distribution systems, has enabled a wide network of private sector engagement across both regions,” it submitted.
“Absent sustained and expanded support for this framework, the scale and scope of the services and goods trade between CARICOM and the US will diminish to the detriment of firms, workers, and broader economic stability.”
Private sector officials shared that exports from the CARICOM member states which benefit from CBI “have declined in recent years, and have seen slower than anticipated recovery from the pandemic, civil strife in Haiti, and economic setbacks from hurricanes and other natural disasters, which has exacted heavy sectoral and GDP impacts, especially for sector such as food and agriculture”.
However, they made it clear that “the CBI remains a high priority for CARICOM beneficiary states, as the region focuses on improving trade performance and building economic resilience”.
“Preserving and deepening the bilateral trade and investment relationship with the US, underpinned by the CBI trade preference programmes and framed by the economic co-operation and dialogue under the CARICOM-United States Trade and Investment Framework Agreement is therefore, of particularly importance for CARICOM Beneficiary countries at this time,” the CPSO said.
Private sector representatives report that while total export values to the US have generally trended upward, surpassing $22 billion in 2024, exports under the CBI programme have not kept pace.
As a result, the CBI’s share of total exports has steadily declined, falling from 24 per cent in 2020 to 13 per cent by 2024.
They also explained that while agriculture was a smaller share of total export value, “it delivers disproportionate social and economic benefits, especially due to micro, small and medium enterprise (MSME) concentration across the region”.
Top exports from CBI beneficiary countries in 2023 and 2024 were frozen rock lobsters, cane sugar led export growth, with “incremental gains” for yams, pastry products, and yellow fin tuna”.
“Conversely, some categories such as fresh fish and spices experienced marked declines, pointing to possible supply constraints or shifting demand patterns,” the CPSO said.
“Overall, the data reflects both the export potential and volatility of the agricultural sector under the
CBI framework, reinforcing the need for continued support to enhance competitiveness, particularly for
MSME-dominated sub-sectors.
In calling for the CBI benefits to continue, the regional private sector body called for the arrangements to be improved, including in relation to accessibility challenges.
The CPSO said that, as it previously communicated to the USTR and others, “several longstanding barriers continue to constrain broader access and usage of the programme”.
These included “the rigid and outdated Rules of Origin under the Caribbean Basin Economic Recovery Act, which have not been revised since the inception of the programme; the administrative complexity and compliance burden relative to the small preference margins, particularly for low-duty products; and limited awareness among exporters and business communities of the eligibility criteria and benefits”.
Preserving CBI legality will require legislative action by the US government and securing a World Trade Organisation (WTO) waiver for the CBI. The US has asked WTO members for an extension of the waiver.
“The CPSO is of the view that there is a clear opportunity for the CBI to deliver greater impact in line with the US developmental and trade objectives, but doing so will require targeted adjustments and dedicated support for both government and private sector actors across the region,” the CPSO said in its comment to the USTR.
“In particular, the evolving global trade environment presents a strategic moment for the Caribbean to be repositioned as a reliable partner for US business interests through nearshoring or supply chain diversification.”
The CPSO advised: “As the USTR undertakes its biennial review of the CBI, it is essential that the programme’s developmental objectives remain central, especially in promoting export diversification, economic participation, and regional stability.
“CARICOM States have demonstrated agility in expanding the range of tariff lines exported under the CBI, including high-performing agri-food products that now face potential erosion due to new tariff barriers.
“The continuation and modernisation of the CBI through broader product eligibility, reduced compliance burdens, and enhanced cooperation can preserve its impact while adapting to a changing global trade landscape.
“By anchoring these efforts within a modernised and flexible preference framework, the CBI can truly serve as a platform for deepening CARICOM-US partnership and boosting economic resilience and development that benefits both parties involved.”
The CARICOM private sector also called for “an agriculture specific carve out for CARICOM from the reciprocal tariff regime [which] would be instrumental in preserving hard won gains and reinforcing a developmental approach to the CARICOM-US trade dynamic”.
