Trump’s Tariffs Could Kill Duty-Free Exports, Raise Prices in Belize

Belizean exports that currently enter the United States duty free, could start facing tariffs if the “Trump rhetoric” materializes, Local Economists Dr. Philip Castillo admonishes in a recent article published in The Reporter.

Castillo explained that reciprocal tariffs, threatened by U.S. President Donald Trump, could unravel the Caribbean Basin Initiative (CBI), as the US President’s stance ostensibly disregards global trade principles. Trump has repeatedly stated that his policy is focused on reciprocity: That is, his administration will charge tariffs on any country that charges tariffs on the USA. This fact, Castillo warns, could destabilize Belize’s fragile, import-dependent economy.

Dr. Castillo, a former representative on Belize’s National Trade Negotiation Commission (NTNC), argues that Trump’s rhetoric on equalizing tariffs runs counter to the World Trade Organization’s (WTO) system of generalized preferences and special and differential treatment (SDT) for developing countries. These frameworks allow preferential access to markets like the United States, acknowledging the developmental gaps between rich and poor nations.

The CBI currently allows most Belizean exports to enter the U.S.duty-free. However, Castillo cautions that Trump’s threatened move to impose blanket tariffs on all countries, including treaty partners, would effectively nullify CBI benefits.

“Mr. Trump is now threatening reciprocating tariffs on all countries, treaty obligations notwithstanding. This would doom the CBI as we know it,” Dr. Castillo wrote. “The obvious hope therefore, is that such rhetoric never becomes actual policy.”

Should such tariffs be implemented, Belizean exports—especially agricultural and light manufacturing goods—would face reduced competitiveness in their most lucrative market. Local firms would likely experience revenue shocks, and employment in key sectors could decline.

Consumers, meanwhile, may bear the brunt of rising prices. Castillo explains that Belize’s heavy reliance on imports makes it vulnerable to inflation, and tariffs on trading partners like Mexico and the EU could raise the cost of goods. “Inflation discourages savings, worsens income distribution, ignites wage demands, impoverishes pensioners and makes local production more expensive and less competitive,” Castillo noted.

Belize’s 2023 import data shows the U.S. as its largest trading partner (41.9%), followed by China (17.2%) and Mexico (9.5%). Several of these partners have already been hit by U.S. tariffs or threats of new ones, creating an uncertain global environment that affects domestic planning and investment.