ECONOMICS Affairs Minister Michael Halkitis. Photo: Austin Fernander
By JADE RUSSELL
Tribune Staff Reporter
jrussell@tribunemedia.net
ECONOMIC Affairs Minister Michael Halkitis said the 10 percent base tariff imposed by the United States is not a major concern for The Bahamas, which does not export a surplus of goods there, but warned that President Donald Trump’s escalating trade war could trigger an economic slowdown.
“Trade War is not good for economies,” he said at the Office of the Prime Minister. “It makes things more expensive, less money to spend, possibly less trade, leading to economic slowdown.”
On Wednesday, President Trump announced a ten percent baseline tax on imports from all countries. He also revealed a broad set of reciprocal tariffs on more than 100 countries. Some nations faced significantly higher tariffs, such as a 34 percent tax on imports from China and a 20 percent tax on imports from the European Union, among others.
Mr Halkitis said the government is adopting a “wait and see” approach to the tariffs, with the policy to take effect on Saturday. He noted that the government is collaborating with CARICOM partners to strategise a response while monitoring the situation. He emphasised that officials do not foresee an “immediate major impact” from the proposed tariffs.
He also highlighted that, based on available data, most of The Bahamas’s exports to the US are seafood or salt, underscoring that the country does not export a surplus of products.
The government’s greater concern is the potential impact of the trade war on the global economy, Mr Halkitis stressed. There are concerns that President Trump’s unprecedented trade policies could lead to a global recession. He also expressed worry that the trade war might harm The Bahamas’ tourism industry due to an economic slowdown affecting people globally. He noted that tariffs in some countries exceed 40 percent and that people may lose jobs, have less disposable income, or be unable to afford travel.
“If there’s a severe economic slowdown in the US, it would impact our tourism industry, our industries on the whole,” he said.
He added that the government is pursuing a trade diversification strategy to reduce the cost of living and find alternative sources for goods, bypassing intermediaries. However, he stressed that the US will remain The Bahamas’s primary trading partner.
He said it is important for the country to maintain fiscal discipline, continue pursuing diversification, and promote itself.
Additionally, the US Trade Representative has proposed imposing fees ranging from $1 million to $1.5 million per port call on Chinese-built vessels and operators using Chinese-built ships. These fees aim to address China’s growing dominance in global shipbuilding and the maritime sector.
Mr Halkitis said the proposed policy is also concerning, as it could have a domino affect on global trade. He noted that a conflict between the US and China over shipping trade dominance could cause collateral damage worldwide.
President Trump displayed a chart while speaking at the White House on Wednesday, showing that the United States would impose a 34 percent tax on imports from China, a 20 percent tax on imports from the European Union, 25 percent on South Korea, 24 percent on Japan, and 32 percent on Taiwan.
Comments
moncurcool 4 days, 2 hours ago
If this is what the minister view is then we are in serious trouble.
ThisIsOurs 3 days, 21 hours ago
I think he's right. We don't have a big export market but we import almost everything. Trump hit all the worlds producers with tariffs, and he's threatening to levy a one mil fee on Chinese manufactured cargo ships.
Even if we establish direct trade routes with alternative markets their profits are down as the US is likely their biggest market and less is sold due to higher prices.
One option for them is to raise prices on the things that are selling or to countries like us who have to buy from someone, with VAT on customs duty and VAT on VAT pricing our costs could spiral.
ThisIsOurs 3 days, 16 hours ago
From cnn:
"In the words of another executive: “We’re just going to have to make fewer shirts and sell them for more money.”
Yup
ThisIsOurs 3 days, 21 hours ago
Btw, Trump is off golfing.
buddah17 3 days, 5 hours ago
Can't China just ship directly to the country ordering, (i.e. Bahamas) bypassing America? (Might make shipping costs cheaper for us too....
ThisIsOurs 1 day, 23 hours ago
You missing the meaning of "global impact". China will take a huge hit in the US which is their biggest market. Think locally, what happens when a company has the exact same costs to run a business but one stream of revenue buckles?
People parroting "a little pain" need to have their heads examined. The stock market is said to have lost 3 trillion dollars in one day. Theres no "bypassing" this unless Trump wakes up Monday and switches everything to the way it was... and even then lives have been destroyed in a second. If a US Citizen retired this week, God help them. I dont know where our local pension funds have their dollars invested.
tetelestai 1 day, 8 hours ago
1) You should know where local pension funds are invested, but they are required to disclose such information.
2) Generally, local pension funds cannot invest internationally, absent CBOB approval. There should be a negligible effect to local pensions. (Those affected will almost certainly be high net-worth individuals, who will be able to weather the storm.)
ThisIsOurs 12 hours, 18 minutes ago
Ah, thank you, I should but didnt so didnt include in the fallout. I dont agree that only high net worth individuals will be impacted though. In the US, already there are reports of auto plants shutting down with workers being put on furlough. Small businesses are crying about disruption to their supply chains and the threat of job losses.
Closer to home, when the stock market crashes our financial services industry takes a hit, the last such devastation took place in 2008, some of our highest paying jobs were gone, offshore companies shut down and they never came back. The hotels laid off hundreds and furloughed many more, some working as little as two days a week. Bahamian Trump parroters think of these events as happening in some far off place with solutions like "just establish new trade routes", but there's no escaping global financial napalm.
Ive realized that most people are perfectly willing to let other people suffer "a little pain" to make things "better" before they raise any alarm. Wealthy people like to repeat nonsense like "all of us need to tighten our belt", meaning theyll just wear the 1,000 dollar elastic pants for the time being. The reasons to ring the bells have been there from January at minimum. Multiple billionaires including Musk, in the biggest surprise ever, raised their heads this week to decry the tariffs because they're starting to or anticipating pain. It was ok for the little man to suffer to aid the Trump agenda, (regular people know how to eat less). One even went so far as to call them "stupid".
The market will bounce back at some point, the only question is how much damage will be done to that point and how much will linger.
ExposedU2C 3 days, 3 hours ago
And to think this dumbo not too long ago was also quoted by a Tribune reporter as having said our nation has absolutely nothing to fear from Trump's new tariffs because our nation exports so little to the US.
This most foolish dolt, who should have nothing at all to do with our country's finances, just cannot appreciate that the US instigating a global tariff war portends disastrous inflationary consequences for our nation because we import so much of our non-US made goods via the US, and these same goods will not be exempt from US tariffs when they enter the US for eventual export to our nation.
Yup, both Dumbo Halkitis and Always Angry Wilson have time and time again proven just how ignorant and incompetent they are when it comes to our nation's financial affairs.
bogart 3 days, 1 hour ago
He needs to have an OBVIOUS conversation with his counterparts in the US to stop rocking our little country and neighbouring country which uses the US currency as our currency. based on special and historic arrangement use.
When our US dollars go down in value or plunges in value, it costs us more to buy from all other countries Bahamas merchants import from and he should at least grow some tingums and have the courage to open his mout and start talking to his US counterparts.
Porcupine 2 days, 22 hours ago
Most all politicians merely do the bidding for the rich, or their dirty work. Here in this country, who really runs things? Billionaires run the world. What more needs discussing? Davis, Wilson and Halkitis are useful idiots who have sold-out The Bahamas. They know this is true. That is why they are taking as much as they can for themselves as quickly as they can. A global depression, whereby billions of people suffer and die has no concern to the rich class. The billionaire class is happy to be able to buy assets for pennies on the dollar. When all bounces back, they will have a greater market share of the world's economy. Don't you think that the US knows what this PLP administration has been up to, and how many hundreds of millions of dollars they have stolen from the Bahamian people? If you don't think so, go back to school. Trump is being allowed to do what he is doing because it benefits the world's richest few people. Those people control the levers of all governments, all industry, all armaments, all police and military, all media. Who among us cannot see this? Remember Divide & Conquer. They are happy to see the US enter a civil war, and for there to be chaos, which we call governance here in The Bahamas. Really think there is that much difference between PLP and FNM once they get in? These guys were all raised here. They are products of our educational system, our culture, our families, our politics. How are we really going to output something different? Garbage in - garbage out. Those in the PLP are simply the worst of our educated class. No honesty, no integrity, no morals. Merely a desire to be as greedy as possible.
ExposedU2C 1 day, 22 hours ago
Not to worry......history is replete with shining examples of what happens to the unconscionably wealthy and rapacious few in every nation or empire when the tipping point is reached. In our hemisphere you need only look at what the poor enslaved Haitians did to their wealthy French masters.
ThisIsOurs 12 hours, 4 minutes ago
Precisely. I constantly repeat, zombies are just masses of hungry people and they can climb gates.I noted with interest sometime back that in relatively non civil unrest Nassau, the US Embassy is built like a fortress. Would have liked to have been a fly on the wall for the planning rationale.
TalRussell 1 day, 17 hours ago
--- She delivered her message right out of the US Embassy's mouth!....Just You Show Up AS Honest in Answering US Embassy Questions and No Visa Worry Concerns for Bahamians. --- Yes?
https://www.youtube.com/shorts/514F8OJe…
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