Containers are stacked on the deck of cargo ship One Minato at Port Liberty New York in Staten Island, New York, U.S., April 2, 2025.
PHILIPSBURG--The Caribbean Hotel and Tourism Association (CHTA) is urging the United States Trade Representative (USTR) to reconsider proposed tariffs and port service fees, fearing significant negative consequences for the tourism economies of both the Caribbean and the US.
CHTA, representing 32 national hotel and tourism associations in the Caribbean including St. Maarten, as well as private sector members based in the Caribbean, the US, and globally, voiced its concerns in a formal letter to the USTR regarding the impact of these potential actions. The letter was also sent to U.S. Secretary of State Marco Rubio and members of Congress, specifically Senators and Congressmen from Florida and the Chairmen of the Senate and Congressional committees dealing with the issue of international trade.
In the letter, the association advocates for an exemption for Caribbean states within the “short-sea” shipping distance of 2,750 nautical miles from the US, to preserve the stability of trade between the US and the Caribbean. “We recommend that consideration be given to the following: An exemption for CARICOM and Caribbean States applicable to ‘Short Sea’ Shipping. … The exemption could be tied to the region maintaining a trade surplus with the United States and adherence to the current bilateral trade agreement – the Caribbean Basin Economic Recovery Act (CBERA),” the submission states.
Additionally, CHTA recommends that existing vessels be “grandfathered” into the new regulations to ensure that smaller vessels, many of which are Chinese-built, do not face the proposed fees, given their critical role in maintaining US-Caribbean trade.
CHTA also advocates for a broader approach to US-Caribbean economic relations, suggesting the establishment of a US-Caribbean Tourism and Economic Resilience Partnership.
“We encourage CARICOM and the United States to establish a structured Tourism and Economic Resilience Partnership or similar mechanism, aimed at: Supporting supply chain stability and growth while stabilising and reducing operating costs to Caribbean tourism, further stimulating benefits to the US economy,” the CHTA proposes. The organisation believes that such a partnership could strengthen the mutual benefits of trade and tourism between the US and the Caribbean, helping both economies recover from the challenges posed by the global pandemic and inflationary pressures.
The letter addressed the critical contributions the tourism industry makes to both US and Caribbean economies. According to the CHTA, the growing tourism sector in the Caribbean “stimulates two-way trade in goods and services, impacting gross domestic product (GDP), creating entrepreneurial and employment opportunities, and generating tax revenue at the local and country levels.” In light of the proposed tariffs and fees, the association expressed deep concern about the potential consequences for US businesses that depend on a stable and growing tourism industry in the Caribbean.
CHTA warned that “should the proposed actions being considered be adopted, along with tariffs, without remedies which mitigate their impact, we expect downside consequences for the region and U.S. business interests which rely on a stable and growing tourism industry – both cruise ship and land-based tourism.”
Tourism has long been a cornerstone of economic development in the Caribbean. In 2024, tourism contributed an estimated US $91.2 billion to the region’s economies and supported 2.9 million jobs. The Caribbean welcomed 16.9 million stay-over visitors from the US, representing half of the region’s total stay-over visitors. Additionally, cruise tourism, primarily from US visitors, accounted for 33.5 million visitors to the Caribbean in 2024.
The region’s growth in tourism continues to drive demand for goods and services, with the US being the largest supplier of food and beverage products to the Caribbean, representing 70-80% of these imports. The CHTA notes that each stay-over visitor to the Caribbean contributes an estimated $944 toward incremental US imports, amounting to roughly $6.2 billion in US exports to Caribbean countries in 2023.
Despite this growth, the tourism industry remains vulnerable to external threats, including high operational expenses. “Tourism-related employment in the region is forecasted to grow between 916,000 and 1.3 million new jobs by 2032,” CHTA reported in its letter. However, the impact of higher port service fees and tariffs could stymie this growth.
“Tourism is already one of the highest-cost travel destinations in the world. Layering additional input costs through higher costs for imports will negatively impact tourism-dependent revenue and employment in the U.S. and the Caribbean,” the letter said. The association further highlighted that 34% of tourism-related businesses in the Caribbean reported operating at a net loss in 2024, underlining the industry's precarious financial state.
CHTA’s letter also highlighted the potential adverse effects of the US proposal to impose high port service fees on all maritime operators, including those using Chinese-built ships. Under the proposed policy, ships making port calls in the US would be required to pay up to $1.5 million per call. This, combined with tariffs, could drastically raise the cost of travel to the Caribbean.
“We expect downside consequences for the region and US business interests which rely on a stable and growing tourism industry,” CHTA warns. It argues that the proposed measures could also harm U.S.-based suppliers and businesses, as many of the goods and services needed by Caribbean tourism businesses are supplied by US companies. “Higher operating costs fueled by five years of inflation are impacting profitability with 34% of Caribbean tourism-related businesses reporting operating at a net loss in 2024. Higher costs will contribute to business failures and lower imports to the region.”
CHTA expressed its understanding of the concerns voiced by the United States and reiterated its hope for continued collaboration. “In the spirit of mutual collaboration and the long-standing mutual benefits realized through trade, tourism and our commitments to free enterprise and democracy, we are hopeful that our recommendations are considered and advanced to our mutual gain,” said CHTA.
The letter, dated April 1, 2025, was from CHTA President Sanovnik Destang and Chief Executive Officer Vanessa Ledesma.
