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HomeCosta RicaHow Trump’s Tariffs Threaten Costa Rica’s Exports and Jobs

How Trump’s Tariffs Threaten Costa Rica’s Exports and Jobs

A 10% tariff on imports from Costa Rica, rolled out by the U.S. government in April, could slash the country’s economic growth from 3.6% to 3% in 2025, says the International Center for Economic Policy for Sustainable Development of the National University (CINPE-UNA). This hit stems from Costa Rica’s tight trade ties with the U.S., its top market.

“Costa Rica’s economic future hinges on international trade, the U.S. economy’s performance, and local monetary policy,” the CINPE-UNA report explains. The tariff, part of Donald Trump’s “Liberation Day” policy, targets Costa Rica’s trade deficit with the U.S. A 90-day pause on steeper rates gives Costa Rica time to negotiate, but uncertainty is already chilling business and investment decisions.

Costa Rica sends 48% of its exports to North America, with 44.5% landing in the U.S. Exports to the U.S. grew 7.6% annually over the past 13 years, surging 22.7% in 2023 to $8,141.5 million. The trade deficit—Costa Rica imports more than it exports—prompted the 10% tariff, though it’s milder than rates on countries like China, which face 34%.

The tariff will sting key sectors. Free trade zones, especially medium-tech manufacturing like medical devices, face heavy losses. In the definitive regime, agricultural exports like pineapple, banana, coffee, and cassava will take a hit. These sectors drive jobs and growth, and the tariff could also deter foreign investment in free trade zones, where firms count on easy U.S. market access.

Marco Otoya, CINPE director, notes that U.S. trade policies are dragging Latin America’s growth to 2.5%, with Central America above 3% but slipping. Higher U.S. consumer prices for Costa Rican coffee and pineapples could curb demand, squeezing exporters further. Neighbors like Guatemala and El Salvador brace for similar trade disruptions.

Costa Rica’s Foreign Trade Ministry is negotiating with U.S. officials, banking on the CAFTA-DR free trade agreement to win exemptions. With tariff talks ongoing, Costa Rica fights to protect its economic edge, but the shadow of the tariff looms large over our country’s future.

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