Cari­com mem­ber states could save over US$1.3 bil­lion a year by re­duc­ing their heavy re­liance on US im­ports, ac­cord­ing to the Cari­com Pri­vate Sec­tor Or­gan­i­sa­tion (CP­SO).

This find­ing was pre­sent­ed on Tues­day dur­ing a hy­brid fo­rum host­ed in col­lab­o­ra­tion with the East­ern Caribbean Cen­tral Bank (EC­CB) at its head­quar­ters in St Kitts and Nevis.

The CP­SO study, which analysed over 1,200 prod­uct lines val­ued at US$9.1 bil­lion, re­veals that near­ly 70 per cent of fi­nal goods im­port­ed in­to Cari­com come from the Unit­ed States. That lev­el of de­pen­dence, ac­cord­ing to CP­SO CEO and tech­ni­cal di­rec­tor Dr Patrick An­toine, not on­ly lim­its the re­gion’s eco­nom­ic flex­i­bil­i­ty but al­so in­creas­es vul­ner­a­bil­i­ty to trade pol­i­cy shifts and in­fla­tion­ary pres­sures.

“While trade open­ness sup­ports eco­nom­ic ac­tiv­i­ty, over-de­pen­dence on a sin­gle source of im­ports clear­ly does not ben­e­fit us,” An­toine stat­ed, point­ing to a widen­ing trade deficit with the US. The re­gion’s goods trade deficit with the US rose by US$200 mil­lion from 2022 to 2023, and again by US$300 mil­lion in the fol­low­ing year. A fur­ther in­crease of US$500 mil­lion is pro­ject­ed be­tween 2024 and 2025, even be­fore ac­count­ing for the im­pact of new US tar­iffs.

In Au­gust, the Unit­ed States im­posed rec­i­p­ro­cal tar­iffs of 10 to 15 per cent on pre­vi­ous­ly du­ty-free goods from T&T and Guyana. The CP­SO es­ti­mates that this would re­sult in a pro­ject­ed ex­port rev­enue loss of over US$653 mil­lion for the re­gion. These tar­iffs al­so cre­ate a cas­cad­ing ef­fect, in­creas­ing costs of goods shipped to the US be­fore reach­ing the Caribbean, adding in­fla­tion­ary pres­sure across key sec­tors.

CP­SO chair­man Ger­vase Warn­er high­light­ed just how con­cen­trat­ed the trade re­la­tion­ship has be­come. The Ba­hamas sources over 60 per cent of its im­ports from the US, while St. Kitts and Nevis de­pend on the US for be­tween 47 and 51 per cent of its im­ports.

To re­duce this risk, the CP­SO rec­om­mends strate­gic mar­ket di­ver­si­fi­ca­tion. The study found that 94.7 per cent of non-fu­el im­ports and 85.8 per cent of to­tal im­ports, in­clud­ing fu­el, could be sourced com­pet­i­tive­ly from oth­er coun­tries. Promis­ing mar­kets iden­ti­fied in­clude Malaysia, Brazil, South Africa, Turkey, and Mex­i­co, where cer­tain goods are avail­able at near­ly half the cost of US al­ter­na­tives.

Still, port con­nec­tiv­i­ty re­mains a bar­ri­er. While Ja­maica’s Kingston port and Trinidad and To­ba­go’s Port of Spain of­fer strong link­ages, many East­ern Caribbean ports lack di­rect ship­ping lines to al­ter­na­tive sup­pli­ers. The CP­SO warned that un­less these coun­tries in­vest in up­grad­ing port in­fra­struc­ture and trade lo­gis­tics, they risk miss­ing out on the full sav­ings po­ten­tial.

With glob­al trade con­di­tions tight­en­ing, the CP­SO ar­gued that now is the time for Cari­com to di­ver­si­fy its im­port port­fo­lio, low­er costs, and strength­en re­gion­al re­silience.