Economists of the Dominican Republic described the United States' sweeping new reciprocal tariffs on global trading partners as costly and detrimental, including a 10 percent tariff on imports from the Dominican Republic.
Amid growing international concern, U.S. President Donald Trump on Wednesday signed an executive order introducing a 10-percent "minimum baseline tariff" on all imports, with higher rates for selected nations.
The Dominican Republic is one of the countries affected by the tariff increases. However, the Caribbean island country is part of a free trade agreement signed in 2004 with the United States and five Central American countries.
President of the Dominican Republic Luis Abinader has stated that he hopes the free trade agreement, which aims to eliminate tariff barriers, will be respected.
In the opinion of economists of the Dominican Republic, the imposition of 10 percent tariffs violates the free trade agreement.
"I would rather think it's an injustice, taking into account what will happen. Next week, Dominican products will enter the U.S., paying 10 percent, but U.S. products will enter the DR, paying basically zero," said Henri Hebrard, an economist.
Trump is shooting himself in the foot with this escalating tariff policy, said Eduardo Klinger, another economist.
"This is a self-inflicted blow for Trump. The American economy is going to suffer; it is already suffering. The stock markets have plummeted, and the customs tariffs that business owners are going to pay will be passed on to the price of products. Therefore, there will be an increase in the price of consumer goods," he said.
This negative impact on the world economy, including the Dominican economy, is gaining strength, representatives of the Dominican business sector said.
"It's a complex process. No one knows if the United States will succeed with these measures. Everyone there will have to figure out how to be more of a winner than a loser. But when these profound processes are involved, there are winners and losers," Hebrard said.
"Problems should be resolved by negotiating, not by threatening or provoking a war that will be very costly for the entire world. The Dominican Republic exports mainly agricultural products and goods from the free trade zone to the United States. However, historically, imports from that North American country are higher, leading to a significant trade deficit for the island," said Klinger.
Dominican economists describe U.S. tariffs as costly, detrimental
Dominican economists describe U.S. tariffs as costly, detrimental
