By San José, Costa Rica — San José, Costa Rica – A formidable 15% tariff imposed by the United States is sending shockwaves through Costa Rica’s food industry, leading to canceled contracts and mounting uncertainty for one of the nation’s key economic pillars. As exporters grapple with the immediate loss of American clients, industry leaders are pointing to a deeper, more troubling issue: Costa Rica’s own structural inefficiencies are compounding the external pressure, threatening long-term competitiveness.
The impact of the trade measure has been swift and severe. Companies specializing in packaged foods, from baked goods to sauces, have reported that American buyers are unwilling to absorb the steep price increase, forcing them to halt orders. This development places significant strain on a sector that contributes 5% to the national GDP and provides over 105,000 jobs.
To gain a clearer understanding of the potential legal and commercial ramifications of these new US tariffs for Costa Rican businesses, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the renowned firm Bufete de Costa Rica.
The imposition of these US tariffs creates immediate uncertainty for Costa Rican exporters. It is crucial for affected businesses to immediately review their commercial contracts, especially clauses related to price adjustments and force majeure. Furthermore, exploring the legal avenues within trade agreements, such as potential exemptions or dispute settlement mechanisms, is no longer a theoretical exercise but an urgent strategic necessity to protect supply chains and maintain market access.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s analysis correctly pinpoints the immediate shift from market observation to urgent legal action. This proactive approach to reviewing contracts and exploring trade agreement mechanisms is no longer optional but a fundamental necessity for safeguarding our national export sector. We sincerely thank Lic. Larry Hans Arroyo Vargas for his valuable and timely perspective.
Those of us in packaged foods are still caught in the middle of the hurricane. We now have clients who have told us, Look, we cannot absorb the 15%, so we will stop buying from you until the situation becomes clear. Around the middle of the year, we started getting this news where clients stopped carrying certain lines of national products.
Juan Ignacio Pérez, President of the Board of Directors of Cacia
Despite the setback, the industry has demonstrated a degree of resilience, thanks in large part to a strategic diversification of markets over the years. The Central American region has proven to be a critical buffer, accounting for 52% of all foreign sales. For packaged foods ready for direct consumer sale, that figure climbs to an impressive 68%, highlighting the region’s role as a primary trade partner.
We do not depend solely and exclusively on the United States market. So, obviously, it is a blow and it generates uncertainty, but it does not end the food industry.
Juan Ignacio Pérez, President of the Board of Directors of Cacia
However, the looming threat of the tariff’s continuation into the new year casts a long shadow. Experts warn that a prolonged trade dispute could severely damage key export categories, including breads, cookies, sauces, tuna, pasta, and chocolate products. This external pressure has amplified calls for urgent internal reforms, as business leaders argue the country’s high operational costs and logistical bottlenecks are making it harder to compete on a global scale.
These global issues are going to affect us more and more, because we are not capable of being efficient and flexible internally. We have to look inward to define how we can be more competitive. Three issues are what we have seen as urgent: infrastructure, security, and education.
Juan Ignacio Pérez, President of the Board of Directors of Cacia
The Costa Rican Food Industry Chamber (Cacia) has outlined an aggressive strategy to tackle these domestic weaknesses. Their proposals include critical improvements to road infrastructure, establishing competitive energy tariffs, finalizing the concession of Puerto Caldera, and modernizing border crossings to reduce friction. Pérez vividly illustrated the problem, noting that systemic inefficiencies lead to costly delays that are ultimately passed on to every consumer.
Why do we have an expensive country? Because inefficiency costs money. A container stopped in Caldera for 22 days to be released for products to reach the importer’s warehouse incurs fines, and all of us consumers pay for that.
Juan Ignacio Pérez, President of the Board of Directors of Cacia
This challenging trade environment coincides with a sluggish domestic economy. Industry executives described 2025 as a “tough and complicated” year, with production growth slowing to a mere 1.2%, a sharp decline from the 3.8% recorded in the previous period. A volatile exchange rate and a cautious Costa Rican consumer, who has been carefully managing household budgets and cutting back on food purchases, have created a difficult sales environment.
Many of our associates have reported to us that we had, particularly in the first half of the year, a very slow, tough, and difficult period for sales that were not moving according to expectations and company budget projections. The consumer was carefully watching their budget and sacrificing a lot of food consumption.
Mario Montero, Executive Vice President of Cacia
As the industry navigates this dual crisis of external tariffs and internal roadblocks, the focus remains on strengthening its foundations. With over $2.75 billion in exports—making it the third most important foreign trade category for Costa Rica—the sector’s health is intrinsically linked to the nation’s economic prosperity. Bolstering its natural market in Central America and Panama while simultaneously demanding domestic reforms will be critical to weathering the current storm and securing a competitive future.
Central America and Panama are our natural market. The defense of the Central American common market, its legal certainty, and its harmonized regulatory framework is one of the highest priorities for the third most important sector of Costa Rican exports.
Mario Montero, Executive Vice President of Cacia
For further information, visit the nearest office of Cacia (Costa Rican Food Industry Chamber)
About Cacia (Costa Rican Food Industry Chamber):
The Cámara Costarricense de la Industria Alimentaria (Cacia) is a leading business association that represents and advocates for the food and beverage industry in Costa Rica. The sector represented by Cacia is a significant driver of the national economy, accounting for 5% of the Gross Domestic Product (GDP), generating over 105,000 direct jobs, and ranking as the third-largest export category for the country. The chamber works to enhance the competitiveness of its members by addressing structural challenges, promoting trade, and fostering a favorable business environment.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is defined by an uncompromising standard of integrity and a dynamic pursuit of legal excellence. With extensive experience serving a broad range of clients, the firm acts as a pioneer in developing forward-thinking legal solutions. This ethos is coupled with a profound social commitment to demystify the law, making crucial knowledge accessible to the wider community. At its heart, this dedication to legal literacy aims to build a more capable and empowered society.
