Costa Rica Faces New Import Tariffs Imposed by the United States
As of April 5, a 10% reciprocal tariff on Costa Rican exports to the U.S. takes effect, generating questions about its impact on consumers and importers.
On April 5, a new 10% reciprocal tariff on exports from Costa Rica to the United States, announced by former President Donald Trump, officially went into effect.
This measure is part of a broader tariff policy affecting 125 nations, which Trump characterized as a significant event, referring to it as 'Liberation Day'.
Alongside Costa Rica, countries in Latin America including Brazil, Colombia, Argentina, Chile, Peru, the Dominican Republic, Ecuador, Guatemala, Honduras, and El Salvador will also see a 10% tariff on their imports to the United States.
Nicaragua will face an 18% tariff, commencing on April 9.
In 2024, Costa Rican exports to the U.S. amounted to approximately $9.4 billion, constituting 47% of the country's total international trade of $19.9 billion, according to the Promotora de Comercio Exterior (Procomer).
Export categories include over 1,100 products, each exceeding $200 in value.
The Ministry of Finance confirmed that the tariff will be absorbed by U.S. importers, alleviating the need for changes in Costa Rican export control systems.
Nogui Acosta, the Minister of Finance, stated that the responsibility for payment lies with U.S. importers.
The impact on consumers in the U.S. is significant, as final consumers typically bear the cost of tariffs.
Víctor Pérez, president of the Costa Rican Exporters Chamber (Cadexco), explained that even though U.S. importers initially pay the tariffs, the ultimate financial burden often falls on consumers, contingent upon various factors such as demand elasticity and the structure of the supply chain, which includes producers, importers, and intermediaries.
The Costa Rican External Commerce Chamber (Crecex) indicated that while the tariff payment is the responsibility of U.S. importers, the cost is likely to be passed along to the end consumers.
Rodney Salazar, president of Crecex, emphasized that Costa Rican exporters are unlikely to raise their prices due to the nature of the tariffs, as they do not affect the exports themselves but rather the market conditions in the U.S.
Both industry representatives have expressed uncertainty regarding which products may be excluded from the tariff.
Discussions are ongoing, and clarity is sought particularly concerning items that fall under the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA).
As of March 30, the Ministry of Foreign Trade (COMEX) had not issued detailed information regarding the implications of the tariff.
In a statement, COMEX mentioned that they were gathering necessary information to evaluate the impact of these measures on the Costa Rican economy.
President Rodrigo Chaves minimized the potential impact of the tariffs, describing the situation as non-catastrophic.
In remarks made during a television program, he pointed out that the uniform 10% increase applied to all exporters means no country gains a competitive advantage over others.
He noted that while American consumers may face higher prices, the implications for Costa Rican exporters should be viewed in perspective, as they are not uniquely disadvantaged compared to their global counterparts.
This measure is part of a broader tariff policy affecting 125 nations, which Trump characterized as a significant event, referring to it as 'Liberation Day'.
Alongside Costa Rica, countries in Latin America including Brazil, Colombia, Argentina, Chile, Peru, the Dominican Republic, Ecuador, Guatemala, Honduras, and El Salvador will also see a 10% tariff on their imports to the United States.
Nicaragua will face an 18% tariff, commencing on April 9.
In 2024, Costa Rican exports to the U.S. amounted to approximately $9.4 billion, constituting 47% of the country's total international trade of $19.9 billion, according to the Promotora de Comercio Exterior (Procomer).
Export categories include over 1,100 products, each exceeding $200 in value.
The Ministry of Finance confirmed that the tariff will be absorbed by U.S. importers, alleviating the need for changes in Costa Rican export control systems.
Nogui Acosta, the Minister of Finance, stated that the responsibility for payment lies with U.S. importers.
The impact on consumers in the U.S. is significant, as final consumers typically bear the cost of tariffs.
Víctor Pérez, president of the Costa Rican Exporters Chamber (Cadexco), explained that even though U.S. importers initially pay the tariffs, the ultimate financial burden often falls on consumers, contingent upon various factors such as demand elasticity and the structure of the supply chain, which includes producers, importers, and intermediaries.
The Costa Rican External Commerce Chamber (Crecex) indicated that while the tariff payment is the responsibility of U.S. importers, the cost is likely to be passed along to the end consumers.
Rodney Salazar, president of Crecex, emphasized that Costa Rican exporters are unlikely to raise their prices due to the nature of the tariffs, as they do not affect the exports themselves but rather the market conditions in the U.S.
Both industry representatives have expressed uncertainty regarding which products may be excluded from the tariff.
Discussions are ongoing, and clarity is sought particularly concerning items that fall under the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA).
As of March 30, the Ministry of Foreign Trade (COMEX) had not issued detailed information regarding the implications of the tariff.
In a statement, COMEX mentioned that they were gathering necessary information to evaluate the impact of these measures on the Costa Rican economy.
President Rodrigo Chaves minimized the potential impact of the tariffs, describing the situation as non-catastrophic.
In remarks made during a television program, he pointed out that the uniform 10% increase applied to all exporters means no country gains a competitive advantage over others.
He noted that while American consumers may face higher prices, the implications for Costa Rican exporters should be viewed in perspective, as they are not uniquely disadvantaged compared to their global counterparts.
