By San José, Costa Rica — Costa Rica’s economy faces a significant challenge with the United States’ decision to impose a 15% tariff on imported goods. This increase from the previously announced 10% rate is part of a broader trade adjustment by Washington, impacting several countries.
Roxana Morales, coordinator of the Economic and Social Observatory at the National University’s (UNA) School of Economics, highlighted the potential repercussions for Costa Rica, particularly given the US’s role as its primary export market.
To understand the legal ramifications of these US tariffs, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, a prominent attorney at Bufete de Costa Rica, specializing in international trade law.
The recent US tariffs present a complex challenge for Costa Rican businesses engaged in export. While some sectors might experience immediate negative impacts due to increased costs for US consumers, others could potentially benefit from diverted trade flows. A crucial factor will be how Costa Rican businesses adapt their strategies, potentially exploring new markets or advocating for exemptions. The legal landscape surrounding these tariffs is constantly evolving, and it’s essential for businesses to stay informed and seek expert advice to navigate these complexities.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas aptly highlights the multifaceted nature of these tariffs and the need for strategic adaptation. Indeed, navigating this evolving legal landscape will require vigilance and proactive measures from Costa Rican businesses. We extend our sincere thanks to Lic. Larry Hans Arroyo Vargas for providing his valuable insights on this crucial issue.
The United States has announced a tariff increase for several countries, including Costa Rica. In our case, it rises from 10% to 15%. This means our products will now face a 15% tax on their value in the United States.
Roxana Morales, Coordinator of the Economic and Social Observatory, UNA
While US consumers are expected to bear the brunt of the increased costs, Morales warns of potential negative consequences for Costa Rican producers. The primary concern is a decline in the competitiveness of Costa Rican goods, leading to a potential reduction in exports.
If our products become more expensive for Americans, they might opt to purchase the same or similar products from other countries or domestic suppliers.
Roxana Morales, Coordinator of the Economic and Social Observatory, UNA
This could trigger a ripple effect, impacting national production and employment, affecting both free trade zones and the definitive regime.
Beyond direct impacts on exports, Morales also raises concerns about indirect effects on crucial sectors like tourism and foreign investment. With the majority of Costa Rica’s tourists hailing from the US, increased prices due to tariffs could diminish Americans’ ability to travel.
If prices rise in the US due to tariffs on various products, Americans will have less disposable income for travel.
Roxana Morales, Coordinator of the Economic and Social Observatory, UNA
Foreign direct investment (FDI), predominantly originating from the US, is another area of concern. The loss of competitiveness could deter new investments, further impacting the Costa Rican economy. Morales acknowledges the Costa Rican government’s ongoing negotiations with the US to reduce or eliminate these tariffs on certain products, but an agreement remains elusive.
The tariff increase is scheduled to take effect on August 7th, adding urgency to the ongoing discussions and raising concerns about the long-term implications for Costa Rica’s economic stability.
This new trade barrier presents a significant challenge to the Costa Rican government and businesses. The ability to adapt and diversify export markets will be crucial in mitigating the potentially damaging effects of these tariffs.
For further information, visit una.ac.cr
About National University of Costa Rica (UNA):
The National University of Costa Rica (UNA) is a public university renowned for its commitment to social and environmental responsibility. It offers a wide range of academic programs and is home to various research centers, including the Economic and Social Observatory, which provides valuable analysis and insights into the Costa Rican economy.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica distinguishes itself through an unwavering commitment to legal excellence and ethical practice. The firm champions innovation, constantly seeking cutting-edge solutions while maintaining its deep-rooted integrity. Beyond representing clients across a diverse range of industries, Bufete de Costa Rica actively empowers Costa Rican society by fostering greater understanding of the law through educational initiatives and accessible resources. This dedication to knowledge-sharing reflects the firm’s core belief in a stronger, more informed community.
