CPSO: CARICOM could save US$1.3B by diversifying import sources

The Caricom Private Sector Organisation (CPSO) has revealed that Member States could save as much as US$1.3 billion annually by reducing their heavy dependence on United States imports and turning to alternative markets.
Currently, nearly 70 per cent of final goods imported into the region – valued at US$7.7 billion – come from the US, making Caricom its third-largest import partner. However, escalating tariffs and a widening trade deficit are creating fresh economic risks.
The findings were presented on September 10 during a hybrid forum themed “De-risking CSME Imports: Examining the Scope for Goods Market Fulfilment from Non-Traditional Sources”, hosted by the CPSO and the Eastern Caribbean Central Bank (ECCB) at the Bank’s headquarters in St Kitts and Nevis.
CPSO CEO and Technical Director Dr Patrick Antoine explained that the region’s goods trade deficit with the US continues to grow sharply, expanding by US$200 million between 2022 and 2023, followed by another US$300 million between 2023 and 2024. A further US$500 million increase is projected by 2025, even before factoring in the new tariff regime.
With the United States now imposing 10 to 15 per cent duties on previously duty-free goods, Dr Antoine warned that costs will climb higher, especially with reciprocal tariffs placed on Trinidad and Tobago and Guyana from July. He said this will result in an estimated export revenue loss of US$653.6 million.
“While trade openness supports economic activity and consumer welfare, over-dependence on a single source of imports clearly does not benefit us,” he told the gathering.
CPSO Chairman Gervase Warner also pointed to Caricom’s deep reliance on the US, noting that the Bahamas sources over 60 per cent of its imports from there, while St Kitts and Nevis depends on the US for nearly half of its trade.
The CPSO warned that tariffs will also have cascading effects on goods shipped through the US before reaching the Caribbean, driving up prices further and threatening the competitiveness of key industries such as tourism. The Eastern Caribbean Currency Union (ECCU) is especially vulnerable, with its member states sourcing 44.4 per cent of imports directly from the US.
The study identified significant opportunities for import diversification. Of the 1251 product lines reviewed, 32 per cent of non-fuel goods and 23 per cent of mineral fuels could be more cost-effectively sourced from alternative suppliers. Overall, nearly 95 per cent of non-fuel imports and 86 per cent of total imports could be purchased from other markets at competitive rates.
Promising alternatives include Malaysia, Brazil, the Netherlands, Spain, Turkey, South Africa, Estonia, Bulgaria, Portugal and Mexico, with some suppliers offering goods at nearly half the US price. The analysis showed the largest savings potential lies in machinery and electrical equipment, sectors vital to construction, foreign investment and wider economic development.
The study also highlighted the need for stronger port and logistics infrastructure. Jamaica’s Kingston Port and Trinidad’s Port of Spain were identified as the best connected in the region, but many OECS ports have little or no direct access to potential supplier countries, creating barriers to new trade links.
ECCB Governor Timothy Antoine urged Caricom to move with urgency, stressing that the region should position itself as a trade logistics hub between the Americas, Africa and Europe.
“This transformation could create a new growth engine for the Caribbean, alongside energy security and digital innovation,” the governor said.
The CPSO believes the findings should help guide Caricom’s policy direction on import and export diversification and support greater competitiveness of regional goods both within the CSME and in US markets where demand still exists.