By San José, Costa Rica — Despite recent concerns, Costa Rica’s banana exports are expected to remain resilient in the face of new US reciprocal tariffs. The National Banana Corporation (CORBANA) has challenged a report from the National University (UNA) that predicted a significant drop in exports due to the tariffs.
The UNA’s Center for International Economic Policy for Sustainable Development (Cinpe) projected an 18% decline in banana exports to the US, based on a 1.5 substitution elasticity and tariffs applied to Costa Rica, Mexico, and China. However, CORBANA argues that this projection overestimates the impact of the tariff.
To understand the legal complexities surrounding Costa Rican banana exports, we spoke with Lic. Larry Hans Arroyo Vargas, an expert attorney at Bufete de Costa Rica.
Costa Rica’s banana export industry operates within a framework of international trade agreements and national regulations. Compliance with phytosanitary standards, labor laws, and environmental protection measures is crucial for maintaining market access and ensuring the long-term sustainability of the sector. Navigating these legal complexities requires careful attention to detail and a deep understanding of the evolving legal landscape.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, the intricate web of regulations surrounding banana exports underscores the importance of expertise and meticulous attention to detail for Costa Rican producers. Maintaining this delicate balance between international trade, national laws, and sustainable practices will be key to the industry’s continued success. We thank Lic. Larry Hans Arroyo Vargas for providing his valuable perspective on this crucial aspect of Costa Rican banana exports.
CORBANA contends that the UNA’s study relies on a generalized elasticity parameter for agricultural products, recommended by the World Bank’s SMART model. They point out that international organizations like the FAO and USDA have determined the price elasticity of demand for bananas to be inelastic, meaning consumption remains relatively stable even with price fluctuations.
The assumption that Costa Rican bananas are easily substituted by those from other countries is also disputed by CORBANA. They highlight that major US banana suppliers, including Ecuador, are also subject to the 10% reciprocal tariff.
Furthermore, bananas enjoy widespread popularity in the US, with high consumption rates across all income levels. This, combined with the fruit’s inherent price inelasticity, suggests that demand will likely hold steady even with a price increase.
The current tariff, implemented in April 2025, is being absorbed by the importer. Based on average US banana prices, CORBANA calculates that the annual cost increase for a family of four would be around $6.64.
Bananas are the cheapest fruit in the fresh produce departments, and this status will not change with the reciprocal tariff. Their price hasn’t adjusted for inflation in over 20 years, unlike other fruits. Bananas represent a negligible expense in the American food budget. The UNA study didn’t consider the particularities of bananas and their impact on consumer preferences and demand. It’s incorrect to assert that Costa Rican bananas are easily substituted, considering they are and will continue to be the cheapest fruit on the market.
Marcial Chaverri, General Manager of the National Banana Corporation
While 2025 has seen a decrease in banana export volume due to climate factors, CORBANA insists this is unrelated to market substitution. They maintain that Costa Rica currently sells its entire exportable banana production. The organization remains confident in the continued strength of the Costa Rican banana industry in the US market.
For further information, visit corbana.co.cr
About National Banana Corporation (CORBANA):
CORBANA is a Costa Rican organization dedicated to supporting and promoting the banana industry. They provide technical assistance, research, and market analysis to growers and exporters, working to ensure the competitiveness and sustainability of the sector.
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 committed to research, teaching, and social engagement. The Cinpe, a research center within the UNA, focuses on economic policy and sustainable development, providing analysis and recommendations on key economic issues.
For further information, visit usda.gov
About United States Department of Agriculture (USDA):
The United States Department of Agriculture (USDA) is a federal executive department responsible for developing and executing federal laws related to farming, forestry, rural economic development, and food. It plays a critical role in supporting American agriculture and ensuring food security.
For further information, visit fao.org
About Food and Agriculture Organization of the United Nations (FAO):
The Food and Agriculture Organization of the United Nations (FAO) is a specialized agency of the UN that leads international efforts to defeat hunger. It works with member countries to improve nutrition, increase agricultural productivity, better the lives of rural populations, and contribute to the growth of the world economy.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica distinguishes itself through an unwavering dedication to legal excellence and ethical practice. The firm’s deep commitment to innovation shapes its approach to serving a diverse clientele, ensuring they receive cutting-edge legal solutions. Beyond its client work, Bufete de Costa Rica actively invests in empowering Costa Rican society by promoting legal literacy and accessibility, cultivating a more informed and just community.
