By Julian Reid

Bahama Journal News Editor

There are growing fears that the proposed U.S. Trade Representative one-million-dollar fee could not only affect business in The Bahamas but also the country’s tourism industry.  The Bahamas is already one of the more expensive tourist destinations in the region and increased costs for importing goods could drive up costs even more, prompting tourists to choose more affordable vacation spots.

Cruise lines coming to The Bahamas are provisioning goods from imports in the United States.  This would be detrimental to the cruise industry and become expensive for Americans who in their millions use cruise ships for vacations.  One industry professional called this “an impending crisis”.

The hearings for the proposed fee increase ended on Wednesday.  On Monday, the President and CEO of Tropical Shipping, which is headquartered at the Port of Palm Beach, Florida told the USTR during the hearings that the proposed tariffs which include a flat $1 million port fee on Chinese-built vessels entering U.S. ports could put his company, which has a major hub in The Bahamas, out of business.

 “The U.S. shipping industry serving the Caribbean cannot absorb the additional costs of the proposed port fees, which would have significant economic consequences,” Martin testified. “Instead of strengthening American competitiveness, these port fees would push American-owned carriers like Tropical out of business.”

Nine of Tropical Shipping’s 19 vessels were built in China up to 25 years ago.  Martin asked the USTR to exempt American-owned and headquartered vessel operators from the proposed fees and to apply the tariffs on future ships built in China, but not on fleets that are already in service.

“I urge this committee to consider exemptions or policy adjustments that ensure American-owned shipping companies are not unfairly penalized for decisions made years before these tariffs, thereby ensuring a fair and equitable policy,” Mr. Martin said.

The fees, if approved, would mean astronomical costs for Bahamian businesses and higher costs for the Bahamian consumer.  Businesses like Super Value have raised concerns saying that the USTR fee could drive inflation here up to 25 percent.

Tropical Shipping is concerned that if the proposed fees are applied to smaller vessels, “we would have to double our freight rates, with an average increase of $2,500 USD per 40-feet container.  An increase of this magnitude would be catastrophic for American exporters and Caribbean consumers”.

Tropical Shipping has pointed out its critical role in the Caribbean, adding that the market depends on its service.

The company says its vessels have also participated in the U.S. Southern Command’s “Tradewinds” exercises, which have been described as “key to maintaining regional security, safety, and prosperity throughout the Caribbean Basin.”

The push for these increases came at least one year ago when, according to the USTR website, “five national labor unions filed a petition requesting an investigation into the acts, policies, and practices of China targeting the maritime, logistics, and shipbuilding sectors for dominance” on March 12 2024.

The port fee proposal is being considered as trade wars between the USA, China, Europe and Canada appear to be escalating with President Donald Trump slapping a 25 percent tariff on Chinese goods and products.

The docket for receiving public comments closed on Monday.   Hearings before the USTR ended on Wednesday. The USTR said post-hearing rebuttal comments must be submitted by seven calendar days after the last day of the public hearing.  It is not clear when a decision will be made.