Puerto Rico business leaders warn of rising prices, tariff impacts
Chamber of Commerce and industry studies show inflation concerns and trade policy impacts.
Consumer confidence in Puerto Rico remains fragile as prices continue to rise and new public policies take effect under the U.S. administration.
“The impact is not only in the continental U.S. but also extends to all territories and the global economy,” Puerto Rico United Retailers Association (CUD, in Spanish) President Ramón Barquín said in an interview with News is my Business.
“Some sectors are taking advantage of the situation to hike prices quickly, when in reality, tariffs on imports from China were already imposed since [President Trump] was the 45th president,” Barquín said.
Additional taxes on imports from Canada and Mexico are also expected to further impact consumers’ wallets, he said.
“Inflation is projected to increase by more than 0.5% due to the first round of tariffs imposed by the U.S. president,” Barquín said. “That will continue as a series of executive orders affect the world’s most advanced economy and, consequently, the global economy.”
Meanwhile, the Puerto Rico Department of Economic Development and Commerce’s (DDEC, in Spanish) Secretary, Sebastián Negrón-Reichard, told News is my Business that a recent study by the Puerto Rico Chamber of Commerce on business and consumer confidence indexes for 2024 highlighted ongoing concerns among Puerto Rican families about the cost of living, as well as key challenges for businesses.
“While the study showed an increase in consumer confidence compared to 2023, inflation and external factors like tariffs continue to drive up prices of essential goods, directly impacting household expenses and business operations,” Negrón-Reichard said.
“At the Department of Economic Development and Commerce, we are actively working to support local businesses and strengthen Puerto Rico’s economy. Through initiatives that provide financial and technical assistance and promote market diversification, we aim to help businesses navigate these economic challenges. Our goal is to provide stability and foster confidence among consumers and entrepreneurs,” he added.
The DDEC chief further noted that Puerto Rico’s unique trade status, skilled workforce and strong manufacturing sector position the island as an ideal destination for companies looking to mitigate tariff risks while maintaining access to the U.S. market. The potential relocation of multinational pharmaceutical and medical device companies, along with their supplier networks, could generate significant investment and job creation.
“As global trade policies evolve, Puerto Rico must seize this opportunity to solidify its role as a leading nearshoring hub, ensuring long-term economic growth and stability,” Negrón-Reichard said.
Consumer, business confidence study
In December, the Puerto Rico Chamber of Commerce released the 2024 Puerto Rican business and consumer confidence index studies, offering insights to guide strategic planning and economic development in 2025.
The 2024 Business Confidence Index was presented by José Villamil, founder of consulting firm Estudios Técnicos Inc., while Tatiana Irizarry-Hilera of global market research firm NielsenIQ led the analysis of the 2024 Consumer Confidence Index. Both studies provided key insights into economic perspectives, consumption trends and future challenges.
One of the main findings was a significant increase in the consumer confidence index compared to 2023, reflecting growing optimism among Puerto Rican families regarding their economic and employment outlook. However, concerns remain about the cost of living, particularly in food and utility expenses.
Although many Puerto Ricans believe the island remains in an economic recession, 70% of respondents think the economic situation will improve or remain stable over the next six months.
On the business side, the study found that 58.6% of companies have regained pre-pandemic sales levels, though they still face challenges. The primary concerns include tax burdens (46.1%), energy costs (41.4%) and the general economic situation (42.8%).
The study also found that while 63.8% of business owners believe the economy is in a recession, there are positive expectations: 40.8% plan to increase their workforce in the next six months, and 49.3% anticipate an increase in profits.
Rising egg prices
Meanwhile, egg prices have risen by more than 15% in January due to the ongoing avian flu outbreak. According to NPR, restaurant chains such as Denny’s and Waffle House have added surcharges to menu items containing eggs.
Barquín noted that “it’s very possible that [local] restaurants that sell a lot of breakfast [items] containing eggs will add a surcharge on these plates.”
Puerto Rico Restaurants Association (ASORE, in Spanish) President Carlos Budet told News is my Business that the egg price increase could impact the restaurant industry, but any adjustment in prices will depend on individual businesses.
“This increase in egg prices is largely due to reduced production caused by avian flu, a factor that has affected the availability and cost of this product globally,” Budet said. “In addition, inflation, operational costs and supply chain fluctuations continue to challenge the industry. Each restaurant owner evaluates their financial reality and determines if menu adjustments are necessary to maintain business sustainability.”
“Not all restaurants have made this decision, as each business operates under different circumstances,” Budet added.
