WASHINGTON, D.C. — Tropical Shipping President and CEO Tim Martin testified before the US Trade Representative (USTR) on Monday, warning that US tariffs could cripple Caribbean trade by imposing catastrophic costs on American-owned shipping companies, US exporters, and Caribbean businesses that depend on Tropical Shipping for essential goods.
The proposed tariffs include a flat $1 million port fee on Chinese-built vessels entering US ports, a move that Tim Martin described as devastating for smaller American-owned carriers like Tropical Shipping. Of the company’s 19 vessels, nine were built in China between 8 and 25 years ago, at a time when building such vessels in the US was impractical.
“The US 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.”
How US Tariffs Could Cripple Caribbean Trade and Raise Freight Costs
Tropical Shipping, headquartered in Riviera Beach, Florida, operates out of the Port of Palm Beach and transports nearly half of all goods imported to the Caribbean, Central, and South America. These goods include poultry, agricultural products, groceries, building materials, medicine, and hurricane relief supplies.
Tim Martin warned that the proposed tariffs would force Tropical Shipping to double its freight rates, making U.S. products less competitive and driving Caribbean consumers to purchase from alternative suppliers at higher costs.
“The proposed fees would force Tropical Shipping to double its freight rates, causing its Caribbean customers to buy from outside the U.S. at a higher cost,” Martin told the USTR.
Smaller Carriers Hit Harder: Disproportionate Cost Impact
Tim Martin emphasized that the tariffs would disproportionately impact smaller vessels that serve the Caribbean region.
The average vessel size in Tropical’s Caribbean fleet is 1,100 twenty-foot equivalent units (TEUs). Applying the proposed $1 million port fee to these vessels would increase the cost per 40-foot container by $2,500 USD, forcing Tropical Shipping to raise freight rates dramatically.
In contrast, a vessel calling on a US port directly from China with a capacity of 16,000 TEUs would see an increase of just $125 USD per 40-foot container — a negligible impact compared to the catastrophic consequences for smaller Caribbean-serving vessels.
Caribbean Trade at Risk: China Poised to Dominate
Tim Martin warned that the unintended consequence of the proposed tariffs would be to shift trade dominance in the Caribbean to China, undermining America’s influence in the region.
“The Caribbean Basin, America’s third border, will become China’s new Red River—a trading route dominated by Chinese carriers and vessels transporting goods from China and other supply sources outside the United States,” Martin cautioned.
If U.S.-based carriers like Tropical Shipping are forced to raise their rates or go out of business, Caribbean importers may turn to Chinese carriers for their shipping needs, diminishing U.S. economic and geopolitical influence in the region.
Tropical Shipping’s Crucial Role in the Caribbean
Tropical Shipping has served the Caribbean region for over 60 years and supports 30 port communities through donations to education and youth development programs. In 2024 alone, the company donated over $500,000 USD to organizations throughout the Caribbean and Central and South America.
“Our on-time, reliable shipping and 60 years of expertise in the Caribbean market cannot be easily replaced,” Martin said. “If these tariffs go into effect, American exporters and Caribbean consumers will suffer, and U.S.-Caribbean trade will decline.”
Tropical’s Role in US Security and Regional Stability
In addition to its economic role, Tropical Shipping plays a part in maintaining regional security. The company’s vessels have participated in the U.S. Southern Command’s “Tradewinds” exercises, described as “key to maintaining regional security, safety, and prosperity throughout the Caribbean Basin.”
Martin emphasized that disrupting Tropical’s operations through steep tariffs would not only affect trade but also weaken U.S. regional security efforts.
Plea for Policy Adjustments and Exemptions
In his concluding remarks, Martin appealed to the USTR to consider exemptions or policy adjustments to prevent American-owned shipping companies from being unfairly penalized for decisions made long before these proposed tariffs were introduced.
“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,” Martin testified.
Tropical Shipping’s full range of services includes refrigerated, dry, Full-Container-Load (FCL), Less-than-Container-Load (LCL), small package, consolidation, inland transportation, and global logistics services. For more information, visit Tropical.com.
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