Can Freeport Save the Bahamas from Rising U.S. Tariffs on Chinese-Made Ships?
A major shift in U.S. trade policy could soon create serious headaches for The Bahamas — but some experts believe Freeport could step up and turn this challenge into an opportunity.
The U.S. is considering imposing up to $1 million per port call on ships that were built in China. Since most of the cargo ships serving The Bahamas and the Caribbean are Chinese-made, this could drive up shipping costs by thousands of dollars per container if they continue passing through U.S. ports.
Myles Culmer, managing director of advisory services at BDO Bahamas, says the Freeport Container Port is perfectly positioned to help. Instead of relying on U.S. ports, he suggests that cargo ships could deliver goods straight to Freeport, avoiding the new U.S. fees altogether. From there, cargo could be redistributed across the Bahamas and the wider Caribbean.
“Freeport should step up and fill the void,” Culmer said. “This could finally make Freeport the true ‘Gateway to the Americas.’ Ships from Europe and other regions could stop in Freeport and bypass U.S. tariffs. It’s a huge opportunity for Freeport’s resurgence.”
Why This Matters for Bahamians
Bahamian businesses and consumers are bracing for higher prices and supply chain disruptions if these tariffs are enforced.
- Michael Halkitis, Minister of Economic Affairs, warned that Tropical Shipping, a major carrier for the Bahamas, could be impacted.
- He emphasized that while the U.S. proposal isn’t finalized yet, it’s critical for the Bahamian government to raise its concerns with U.S. officials.
- “We can’t be collateral damage in a trade war between two giants,” Halkitis said.
If shipping costs rise significantly, Bahamians could see prices climb on everyday goods, from food to building materials.
Calls for Supply Chain Diversification
Barry Griffin, chairman of The Bahamas Trade Commission, highlighted how this situation proves the urgent need for The Bahamas to diversify its supply chains.
- Relying too heavily on U.S. shipping makes the economy vulnerable.
- Griffin urged businesses, especially those in key sectors like food and construction, to work with the government to find new suppliers and shipping routes.
“If we diversify, it will make Bahamian businesses more competitive, goods more affordable, and our economy stronger and more resilient,” he said.
The Trade Commission is already engaging with shipping companies and industry partners to assess the potential impact and prepare strategies to protect Bahamian businesses and consumers.
Monitoring the Situation
Dion Bethell, president of Arawak Port Development Company (APD) in Nassau, said his team is closely monitoring the developments.
While the situation is still evolving, he acknowledged that higher shipping costs could eventually trickle down to local businesses and consumers.
Is There Hope?
Interestingly, a recent analysis by the U.S. National Law Review suggested that existing Chinese-made vessels already serving The Bahamas might not be subject to the new $1 million port fee.
- The proposed fee mainly targets new vessels that U.S. carriers order from China.
- However, there’s also talk of a draft executive order that could impose tonnage-based fees on all Chinese-made ships entering U.S. ports.
- If signed by Donald Trump, this could expand the impact even further, though exact details are still unclear.
If the $1 million fee goes into effect, it would apply mainly to carriers where 50% or more of their newly ordered ships are from China and are scheduled for delivery within the next 24 months.
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Whether through strengthening Freeport’s role as a regional hub or diversifying supply chains, it’s clear The Bahamas must prepare for a future where relying too heavily on U.S. ports could come at a steep price.
This is a developing story. Stay tuned for updates on how it unfolds.
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