The Central Bank of Aruba has published a policy study, “The Potential Impacts of U.S. Tariffs on the Aruban Economy”, analysing how potential U.S. tariffs could affect Aruba, with imported inflation identified as the main direct channel and reduced U.S. consumer disposable income as the main indirect risk through tourism. The analysis also highlights possible spillovers to energy costs and construction activity. Given Aruba’s reliance on the U.S. for roughly half of imports and 75% of stayover tourists (2024), the study models baseline, mild, and severe trade-war scenarios and estimates a month-over-month goods import-price shock of 2.4% to 5.8% in July 2025, translating into a CPI inflation shock of 0.8% to 2.0% month-over-month. On a period-average basis, the scenarios raise 2025 inflation by 0.3 percentage point to 0.6 percentage point versus baseline, with inflation moving from 1.1% in the baseline to 1.4% (mild) or 1.7% (severe). For tourism, it adapts Aruba Tourism Authority downside assumptions by modelling a 3% (mild) or 6% (severe) year-over-year contraction in stayover arrivals from August 2025 to July 2026, followed by a return to baseline growth of 2% in the mild scenario and an ongoing 3% decline in the severe scenario. Policy recommendations include deepening regional trade integration to reduce import dependence, diversifying tourism markets beyond the U.S., and investing in local production, particularly agriculture. The authors note the analysis was written in March and April 2025 and may require amendment as U.S. policies evolve.

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