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As the United States and China continue to exchange blows in a tariff war on goods traded between them, an economist predicts that increased prices on local imports could eat into Barbados’ foreign exchange reserves, and drive up the cost of providing services.
Professor of Economics and Deputy Principal of the University of the West Indies at Cave Hill, Winston Moore says if Barbados begins to experience significant price increases on imports, because of steep U.S.-imposed tariffs on goods from countries like China, this would result in a faster drawdown on the island’s foreign reserves on any type of imports from the U.S.
In a sit-down with CBC News, he pointed to Barbados’ trade deficit with the U.S., importing around $700 million dollars worth of goods for 2023–2024, while exporting approximately $50 million dollars worth.
Barbados, like most countries, is facing a ten per cent baseline tax on all its imports into the U.S., but Professor Moore believes the country ought to be concerned about the impact of its imports on the provision of services—because as U.S. tariffs are applied to goods coming from abroad, the prices of goods would affect the service sectors here.
Today, China upped its retaliatory tariffs on U.S. imports to 125 per cent, escalating the trade war between the world’s two biggest economies.
Join The People’s Business on Sunday night at 8:00 p.m. for additional insights from Professor Winston Moore on the likely effects of U.S.-imposed tariffs, and proposed shipping levies on Barbados.
