There is a “real threat” that food and electricity bills in the Virgin Islands will spike because of the tariff war unleashed by United States President Donald Trump, Premier Natalio “Sowande” Wheatley has warned.
Mr. Wheatley gave his assessment after the White House slapped levies on nearly every country and territory across the world, including a ten percent import duty on goods from the Virgin Islands.
Few VI businesses will be directly hit by the duty, which does not affect the territory’s dominant financial services sector, but the premier said the cost of imported groceries and oil will likely rise here.
“We face a real threat with these tariffs of higher prices for everything that’s imported,” he told the Beacon.
As well as the food stuffs, the price of oil used by BVI Electricity Corporation will also be impacted by Mr. Trump’s trade war, the premier said.
“Not just the ten percent tariffs on the BVI, but the tariffs on all the different countries, especially these countries that export quite a bit that eventually ends up in the BVI, will have an inflationary effect,” Mr. Wheatley said.
Tropical Shipping
The premier also agreed with the CEO of Tropical Shipping — which transports about half of the goods imported to the Caribbean and Central and South America — that the company could go under after Mr. Trump announced a port fee of $1 million for each Chinese-made vessel to dock in the US.
Tropical Shipping CEO Tim Martin asked the US Trade Representative in Washington DC last month to change tack, explaining that nine of his company’s 19 ships were constructed in China and the fees could put the company out of business.
This week, Mr. Wheatley echoed fears about the company’s future under the proposed new rules.
“Persons will seek different means of being able to get their goods, and it may be through different shipping routes,” he said. “Hopefully, Tropical and others will adapt their business model to deal with the new realities, and I know that they are also making strong representations to the United States government for exemption of the Caribbean, and we are hopeful that those lobbying efforts are successful.”
Silver lining?
Mr. Wheatley, however, also saw a silver lining in the recent turmoil.
“The good thing is that the shipping companies, the suppliers, are being proactive about, basically, seeking markets for goods and new shipment routes to try to avoid some of the tariffs and the penalties,” the premier said.
On Monday, he added in a statement that he has been meeting with stakeholders to discuss the escalating situation.
“Safeguarding the economic interests of the Virgin Islands is our utmost priority, and we will continue to do all we can to ensure the stability of our economy and the prosperity of our society,” he said. “We are actively engaging with key stakeholders from across industry and will be meeting with business leaders and retailers over the coming days to ensure our response protects the needs and interests of BVI consumers as effectively as possible.”
DR talks
In a related effort, Mr. Wheatley’s special envoy, Benito Wheatley, has continued trade talks with representatives of the Dominican Republic.
The envoy met last week with Hugo Francisco Rivera Fernández, the DR vice minister for economic affairs and international cooperation, in the margins of the Eighth Meeting of the Forum of the Countries of Latin America and the Caribbean on Sustainable Development held from March 31 to April 4 in Santiago, Chile.
“The impressive economic growth and development of the Dominican Republic over the past decade has seen the country emerge as a critical economic hub in the Caribbean,” Mr. Wheatley said afterwards. “As a close neighbour, the British Virgin Islands can benefit from the Dominican Republic’s regional and international trade and transportation links.”
He added that the territory will continue working with the DR to strengthen economic cooperation, including organising a trade mission there in the near future.
Mr. Trump’s tariff war hit nearly every country and territory in the world, with the few exceptions including Russia and North Korea, which are already heavily sanctioned.
The US president says the levies are “reciprocal” and intended to rebalance international trade in favour of the US.
While the VI drew a duty of ten percent on imports to the US, a fellow British overseas territory, the Falkland Islands, incurred a rate of 41 percent.
The plan drew ridicule after it emerged that the White House had also imposed a ten percent tariff on imports from an Australian territory, Heard Island and McDonald Islands, which is uninhabited.
