Jamaica must brace for effects of US tariffs, says trade specialist

 

International trade specialist Daenia Ashpole says consumers in Jamaica will not be spared from the effects of the 25 per cent tariffs on all steel and aluminum products entering the United States.

 

US President Donald Trump says the tariffs, which will take effect on March 12, will be implemented without exceptions or exemptions.

 

Speaking Wednesday morning on TVJ's Smile Jamaica, Ms. Ashpole explained that tariffs on all steel and aluminum products will drive up the cost of doing business and make consumer goods more expensive.

 

She argued that manufacturing companies in Jamaica will be among those hardest hit by the tariffs because many of their end products are intermediate goods from China. 

 

"Packaging, for example. So for example, if you have a manufacturer that uses cans, say for a soft drink, that import becomes more expensive because it contains those elements. You also have the transshipment. Most of our goods do not come straight from other countries to Jamaica. Ordinarily, it will go through the United States and so they will be subjected in some instances to tariffs that will be then passed on to our consumers and manufacturers in Jamaica," she explained. 

 

In the meantime, Ms. Ashpole believes local manufacturers should explore other supply sources of goods amid the US imposing 10 per cent tariffs on all Chinese imports.

 

"There is an idea in trade of competitive advantage. The reason you take intermediary goods from China is because it is perhaps cheaper to produce in China, so the final product is cheaper as an input into your goods. So even with the tariffs, we need to look at specific concerns for manufacturers and what that means in terms of cost."

 

She said while a 10 per cent tariff may not automatically result in goods becoming more expensive, each manufacturer or distributor in Jamaica will need to look at their specific case, assess any likely disruption and may need to find alternative supply sources. 

 

Still, Ms. Ashpole said Jamaica could benefit from nearshoring, which is the practice of transferring a business operation to a nearby country.