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Manufacturers Association President Rafael Vélez Domínguez stated that while the new tariffs imposed by President Trump pose a threat to everything Puerto Rico imports, the U.S. territory can use this situation to attract foreign companies by demonstrating that it is a more advantageous place to invest compared to countries affected by the tariffs.
“I see these tariffs as a tool the Trump administration is using to negotiate various issues, such as discussions with Canada regarding fentanyl and with Mexico concerning immigration. This is a short-term measure that can be implemented and then suspended repeatedly. It raises questions about the ongoing negotiations. Therefore, we in Puerto Rico must remain cautious and avoid reacting to changes that might only be temporary,” he explained.
“Nonetheless, these tariffs are a threat to all imports. Importers, including manufacturers who rely on raw materials, must diversify their supply sources to protect themselves against potential future tariffs,” he added.
“Today it’s Mexico facing tariffs, but tomorrow it could be Colombia, the Dominican Republic, or others. We also have the chance to turn this situation into a significant opportunity. We can persuade companies that investing and establishing operations in Puerto Rico is a better option than in Mexico, Colombia, Panama, or the Dominican Republic, especially since we aren’t faced with the same tariff threats,” he emphasized.
“In this context, I believe we should leverage these circumstances to create a competitive advantage for Puerto Rico, making it an attractive destination for companies,” he said.
Many people assume that rising costs will automatically lead to higher prices, but this is not always true—the market ultimately dictates pricing. For instance, if a 25% tariff is placed on avocados imported from Mexico, importers will seek avocados from the Dominican Republic, Ecuador, or Colombia, where there will be no such tariff. This presents a great opportunity to begin local avocado production, which is something we should actively promote,” he concluded.
