If tariff hikes are indeed imposed on Canada and Mexico as announced by US President Donald Trump on what he called “Liberation Day” today, Wednesday, the world is looking at a costly trade war. With Europe, China and others also affected, experts predict in certain cases double-digit price hikes later this year.
That’s bad news especially for low- and middle-income groups. Those having to depend on a minimum wage or AOV old age pension are among the most vulnerable.
Remember that consumer prices already rose considerably since the COVID-19 pandemic due to a drop in production and the subsequent war in Eastern Europe. When adding contributing factors including the current bird flu’s impact on egg and chicken farms, it becomes clear why grocery bills have been going up.
The new American administration’s protectionism, despite having proved a failed economic policy a century ago, will probably lead to more reciprocal and/or retaliatory steps from targetted countries. This could culminate in an inflationary spiral.
Under such circumstances, businesses are forced to pass expense increases directly on to clients. The same goes for raising salaries of employees in an effort to maintain their buying power.
Not only that, but the latter risks making the tourism destination less competitive. Keep in mind that many potential visitors are facing uncertainty and a rising cost-of-living themselves, while others have lost income or – potentially – even their jobs.
They might not travel and vacation as much, or reduce spending when they do. That is not an attractive prospect for the local hospitality industry.
The proposal by Finance Minister Marinka Gumbs (see Monday newspaper) for a taskforce to mitigate the consequences of these developments appears sensible enough. The Chamber of Commerce expresses its support in today’s edition.
However, as an island that imports practically all its goods, short-term recourse is limited. What can responsibly be done will nevertheless meet with a positive response, because when it comes to sheer survival, every little bit counts.
April Fools’ Joke
Attentive readers will have noted Tuesday’s front page story titled “Two-for-one guilders exchange today only” was a hoax. Believing the Central Bank would really double the money in Caribbean guilders for those who brought Netherlands Antillean guilders there while both have the same value might have been slightly naive. Apart from the date, needing to do so in just three minutes – from 8:58am to 9:01am – was a major hint.
The Daily Herald apologises to all involved for any inconvenience continuing this long-standing April 1 prank tradition caused. As the saying goes, if something seems too good to be true, it probably is. Be ready next time!
