Intense lobbying is the reason why the Cayman Islands isn’t suffering from the latest US tariff – at least for now.
On 16 Oct., the US implemented new fees on Chinese ships built, operated or owned calling into US ports. The measure is part of Washington’s response to China’s state subsidies in shipbuilding.
That could have hit Caribbean US trade as most vessels in the region are Chinese-built. Yet a ‘short sea shipping’ exemption on voyages less than 2,000 nautical miles means boats from Cayman can still enter the US tariff-free, even if they were built in China.
Speaking on the 16 Oct. edition of CompassTV’s Forefront, Cline Glidden Jr. revealed that a sophisticated Caribbean lobbying campaign earned a reprieve for the region.
“There’s been a lot of lobbying going on,” said Glidden. “We’ve been in Washington, working with our counterparties. At one stage I remember being on a Zoom call with 400 members in the Caribbean – shipping organisations – working to get lobbyists in Washington to get a reprieve.”
Economic impact
Given that Cayman is a small island economy that imports more than 80% of its goods from the US, the value of the reprieve is significant.
“If a tariff on China-made ships had been applied to the trade between the US and Cayman it would have pushed up import costs for the islands,” said local economist Julian Morris, “So, the reprieve is clearly a good thing.”
The volatile nature of this US government’s policymaking means Cayman can’t rule out future tariffs. “We are not dealing with [the China-ship tariff] at this particular point in time but we don’t know what’s forthcoming,” said Glidden.
“I think if significant tariffs were imposed in the future, you would see a shift in trade patterns,” said Morris. “Caymanian importers would start buying more goods from outside the US and use other transshipment ports like Panama and the Dominican Republic.”
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Over 95% of all new ships are built in China. Due partly to their government subsidies.