The latest round of tariff announcements only that a quarter of US imports will be subject to at least an additional 10%. Additional tariffs imposed on 47 countries primarily in the Asia Pacific and across Africa range between 11% and 50%. Three Pacific Island countries – Fiji, Nauru and Vanuatu will be subject to additional tariffs starting 9 April. While about a quarter of US import value will be exempted from tariffs, only a very small percentage of exports from Pacific Island Countries will be able to escape tariffs.
Latest Announcements
On 2. April 2025, the US administration made its most significant announcements on tariffs so far, with a minimum 10% on all trade partners starting on 5 April and higher rates on an additional list of 57 countries starting on 9 April.
These range between 11% and 50%. This includes a number of Pacific Islands Countries, including Fiji (32%), Nauru (30%) and Vanuatu (23%). Australia and New Zealand would not be subject to additional tariffs at this time.
However, the latest set of measures do not apply across the board to all products and all circumstances. In brief terms, the exceptions are as follows:
- Steel and aluminium products already covered by the 25% tariff announced on 10 February 2025
- Automobiles and automotive parts covered under the 25% tariffs on non US content announced on 26 March 2025.
- A list of about 1000 products excluded from tariffs which range from chemicals, pharmaceuticals, metals and metal ores, wood and wood products, critical minerals and semiconductors (more on this later).
- Articles subject to Column 2 of the Harmonised Tariff Schedule of the United States (HTUS) – that currently includes Belarus, Cuba, North Korea and Russia which are subject to higher rates and under sanctions.
The new duties also apply to countries where an existing trade agreement would foresee other tariff rates. As per US Government communication the date of vessel loading is relevant in determining the cut off. This gives some limited respite for shippers who manage to send goods within the next days.
Pacific Island Trade with the United States
Fiji is the most important US trading partner in the Pacific. In 2024, the United States imported roughly US$347 million worth of goods from Fiji, while exporting US$95 million. Vanuatu and Nauru, which also export more to the US than they import only generated US$22 million and US$5million.
91% of the value of exports from Fiji to the US consist of food, beverage and seafood products. The number one product is Fiji Water, which over the past 10 years has accounted for between 48% and 66% of total export value to the US. Other important products include fish and fish preparations, turmeric, sugar and plants used in perfumes and cosmetics. Vanuatu’s exports to the US consist mostly of plants used in perfumes and cosmetics and seafood.
Exceptions
About a quarter of the value of US imports will not be subject to the additional ad valorem tariffs. This encompasses about $1.3 trillion worth of imports consisting mainly of petroleum and products, pharmaceuticals, chemicals, semiconductors as well as various wood and metal products.
Pacific Island Impacts
Only about 2% of the value of Fiji’s exports to the US fall under the 1041 tariff lines excepted from the latest round of tariffs. This mostly consists of about US$8.3 million worth of tropical wood. In Vanuatu and Nauru’s case this affects around $200,000 and $100,000 worth of trade, respectively.
A quarter Fiji export value is destined for the US. Excluding petroleum products distributed to other pacific island countries, principally Tonga, Cook Islands, Wallis and Futuna and Tuvalu, the US share of exports is almost 30% of exports.
Almost all Fiji Water exports are destined for the US, so a 32% tariff is likely to be problematic unless importers are willing to accept a 32% increase in costs.
Turmeric exports to the US have grown from around 80 tonnes per month in 2019 to about 320 tonnes a month today, most of which is flown by air. Fiji and India are the main sources of turmeric into the US. Indian imports will also be subject to higher tariffs at 27%, which is marginally lower than the rate to be applied to imports from Fiji. In this sense, Fiji is unlikely to lose market share to other markets, but overall demand may be affected.
Direct seafood and sugar exports are primarily destined for non-US markets, and as such the main impacts may be a change in flows to other markets rather than a loss in volume.