Costa Rica caught in crossfire of global trade tensions

The U.S.-China trade war is creating new challenges for Costa Rica’s export-reliant economy. As of April 5, 2025, Costa Rican goods now face a 10% tariff in the U.S., its largest trading partner, which buys 47% of Costa Rica’s $9.4 billion in exports. This move, though lighter than the 145% tariff imposed on Chinese imports, threatens key sectors such as pineapples, according to Latin media.

China responded to U.S. tariffs with its own 34% duty on U.S. goods and limits on rare earth exports, raising global trade tensions. Costa Rican economists warn of a potential slowdown, with reduced U.S. demand risking negative growth and currency pressure due to lower export income.

The Costa Rican Chamber of Foreign Trade (CRECEX) noted a short-term benefit: a temporary 90-day suspension of higher U.S. tariffs for most countries except China, giving Costa Rica a relative edge. At 10%, its tariff is lower than those faced by Asian exporters.

Costa Rica’s government is pushing for stronger ties with the U.S. under CAFTA-DR, which secures tariff-free access for many products, and is working to diversify trade through deals with the EU, Asia, and Latin America.

The broader Central American region faces similar risks, with countries like Guatemala and El Salvador also exposed to shifting U.S. trade dynamics. Costa Rica’s ability to adapt depends on securing trade protections and opening new markets amid ongoing global uncertainty.

source: ticotimes.net

photo: itfnet.org