The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Polymers International’s top executive yesterday asserted “it’s not going to come to that” when asked if the new US 10 percent tariff on Bahamian exports, plus the Chinese ship fee, could end its presence in Freeport.

Greg Ebelhar, the Freeport-based manufacturer’s chief operating officer, told Tribune Business that while it was still assessing the impact of President Donald Trump’s tariff announcement it has “bigger fish to fry” with the US over the proposed $1m fee per port call is is threatening to impose on Chinese-made vessels.

Tropical Shipping, which has previously warned the Chinese-made ship fee threatens its very survival by potentially adding $585m in annual port-related charges, is the carrier that transports Polymers International’s expanded polystyrene (EPS) product to the US, its largest export market.

Mr Ebelhar, while confirming the Chinese-made vessel port fee is presently of “more concern” to Polymers International’s business model, also told this newspaper that yesterday’s US tariff announcement appears to cut across and violate the Caribbean Basin Initiative (CBI). That is the one-way trade preferences regime, offering duty-free and other concessions, under which Polymers and other Bahamas exports enter the US.

The 10 percent “reciprocal tariff” rate that will be imposed on Bahamian exports to the US appears to be based on, and designed to match, the 10 percent VAT placed at the border on all goods that enter The Bahamas. This nation received the “baseline”, or lowest, of the multiple tariff rates that Mr Trump imposed on numerous countries’ US exports yesterday, while its own higher duty rates were seemingly ignored.

The Bahamas exported some $669.949m worth of physical goods in 2024, many of which are now threatened with cost increases - which may challenge their competitiveness - by the imposition of Mr Trump’s so-called ‘liberation day’ tariffs. It is unclear, though, whether all these products were made in this nation or if some transited through The Bahamas on their way to the US.

Besides Polymers International, other Bahamian exports to the US include crawfish and other fisheries products; Morton Salt’s approximately one million tonnes of salt per annum from Inagua; Kalik, Sands and other local brands brewed by Commonwealth Brewery and Bahamian Brewery and Beverage Company, and other niche products and producers. The White House said the tariffs will take effect at midnight on Friday.

Adrian LaRoda, the Bahamas Commercial Fishers Alliance’s president, told Tribune Business that this nation’s crawfish and other fisheries exports will face “a bumpy ride” if the 10 percent US tariff rate remains in place beyond August 2025. While most of this nation’s roughly $80m annual fisheries exports go to Europe, Canada, Asia and non-US markets, a significant quantity transits through US ports.

This means they will be caught by the US tariffs. Mr LaRoda branded this “a bitter pill”, although he voiced relief that 2024-2025 crawfish exports will largely have missed the levy with the season having closed on March 31. However, with crawfish exports fetching $25 per pound - almost double the domestic market rate - he warned that The Bahamas cannot afford for this market to be disrupted by Mr Trump.

The Davis administration, in a statement last night, alluded to the 10 percent tariff representing a violation of the Caribbean’s existing trade agreement with the US. It pledged to work with regional nations, via CARICOM, and US officials to respond to Mr Trump’s measures.

“The Government of The Bahamas has taken note of the announcement by US president, Donald Trump, to impose a 10 percent reciprocal tariff on several Caribbean countries, including The Bahamas, that export duty-free to the US under the Caribbean Basin Initiative (CBI). It is important to note that The Bahamas currently maintains a trade deficit with the US,” the Government said.

“We will engage with our US counterparts, and work collectively with our CARICOM partners, in response to this development. The Government has approved a National Trade Policy aimed at diversifying trade.

“As part of our broader strategy to protect the Bahamian economy, we have already announced a number of measures, including the development of a trade diversification framework. We remain focused on minimising the impact of global trade decisions on Bahamian businesses and consumers.”

The Bahamas’ trade deficit broke through the $4bn mark for the first time last year to hit $4.2bn This represents a 22.6 percent, or close to $750m year-over-year increase, on 2023’s trade deficit of around $3.487bn, which means this nation imports far more than it exports. And the US is The Bahamas’ largest trading partner and export market, accounting for 88 percent of total exports, and 74 percent of domestic exports.

The $4.274bn trade deficit for last year sets a new annual record, exceeding the six-year high of around $3.487bn in 2023 which was itself a 7 percent or $233m jump on the figures for 2022. The Bahamas in 2024 imported close to $5bn worth of goods, the actual number standing at $4.944bn, while exports in comparison stood at a relatively meagre $669.949m.

Mr Trump’s tariffs also likely mean increased costs, inflation and supply chain disruption for Bahamian consumers on the import side given that they will raise prices for all foreign-manufactured goods transiting through the US to these shores.

“We’re still evaluating that ourselves,” Mr Ebelhar replied, when asked what impact the 10 percent tariff on Bahamian exports will have for Polymers International. “Our exports go under the Caribbean Basin Initiative (CBI). I think our biggest thing right now, which is throwing us more than anything else, is what they’re trying to put on shipping companies; the $1m per ship coming into the US.

“Tropical carries most of our container loads over there. For 100 containers, that’s a lot of money. That’s a bigger fish to fry for us right now. The rest of it with the tariffs, the way I look at it is whatever happens it’s going to be equal all the way around. It’s wait and see. That’s exactly where it is. The shipping side of it is causing us more concern right now.

“If we have 100 containers on there, and $1m is going to be taxed on the ships coming in, it’s very hard. There’s absolutely no way we can afford that.... We know what the rough sales price of EPS (expanded polystyrene) is in the US. You can she what we ship in research from the Bahamian government,” he added.

“If you add $10,000 a container on 40,000 products, come on. There’s no way we can, in any way, shape or form, justify that operation.” But, when asked if this threatens Polymers International’s very survival in Freeport, Mr Ebelhar replied: “I don’t think it’s going to come to that in the long run. Maybe there’s a little too much Chicken Little right now and not enough cooler heads trying to settle the issue.”

Mr Ebelhar said it was “unfortunate” that The Bahamas and wider Caribbean has been caught in Mr Trump’s tariff and ‘trade war’ policies, which he believes are primarily targeted at Europe, Canada, China and Mexico, and hinted he was optimistic that the region could negotiate a “carve out” or exemption given its trade deficit with the US.

Mr LaRoda, meanwhile, also voiced concern about the proposed up to $1.5m fee to be levied on Chinese-made ships for every US port call. “The unfortunate thing is we are hoping that this whole tariff thing, and situation with Chinese-made vessels and port stuff, we hope that gets resolved.

“It impacts no so much our exports but the cost to the customer. The tariffs are going to affect the cost for exports.” Explaining that much of The Bahamas’ Europe-bound fisheries exports will transit through US ports, and thus potentially be caught by the new 10 percent tariff, he added that such products fetched double domestic sales at $25 per pound compared to $13 during the past season.

“I’m optimistic it will not affect the season just gone because it’s closed,” Mr LaRoda said. “Next season, though, we will definitely be seeing some reduction in demand if these tariffs are attached and still there. It’s an issue. It’s a bitter pill, but we are hopeful there will be a resolution in time and I’m optimistic there will be a rethink.

“Most of our product has already been exported, so it will not have an impact so much this season just gone, but if it holds for next season, August, we’ll have a bit of a bumpy road I would expect. I’m hoping something does get worked out. It’s basically a wait and see game at the moment. We could be in for a bit of a bumpy ride if these tariffs remain in place. It could be a bit of a bumpy road.”