Ceasefire, Collapse and a Tariff Bombshell: The Quarter That Changed Everything for the Caribbean

Jamaica Homes Global Conflict & Caribbean Impact Review — Edition 6 | Published 3 April 2025 | Reporting Period: 3 January – 2 April 2025

Quarterly Briefing

• Gaza ceasefire begins January 19; first hostages freed and Houthis pause Red Sea attacks.
• Red Sea partially reopens as shipping cautiously returns — then ceasefire collapses March 18.
• Trump inauguration January 20: demands Panama Canal back; threatens China, Mexico, Canada tariffs.
• Venezuelan warship approaches ExxonMobil vessel in Guyana’s EEZ on March 1; US issues sharp warning.
• Trump-Putin call March 18 produces limited 30-day energy infrastructure truce in Ukraine.
• Trump’s 10% “Liberation Day” tariff hits Jamaica on April 2; Caribbean Basin Initiative potentially imperilled.

Prologue: Ninety Days That Rewrote the Map

The quarter between January 3 and April 2, 2025, may prove to be one of the most consequential in recent Caribbean history. It began with the first genuinely hopeful development in the Middle East in fifteen months: a ceasefire between Israel and Hamas that, on January 19, brought an end to the active combat phase of the Gaza war, paused Houthi attacks on Red Sea shipping, and allowed the first Jamaican and Caribbean importers in more than a year to contemplate receiving goods through the Suez Canal at normal cost. For roughly seven weeks, a new economic reality seemed possible.

Then the ceasefire collapsed. On March 18, Israel launched a new offensive in Gaza, citing Hamas’s refusal to progress to the hostage deal’s Phase 2, ending the truce and immediately reopening the question of Houthi Red Sea operations. By the time April arrived, the situation had deteriorated further: the US was bombing Yemen, the Houthis had resumed threatening shipping, and a humanitarian crisis in Gaza was deepening under a complete aid blockade that Israel had imposed on March 2. And then, on April 2 — the final day of this reporting period — President Trump signed executive orders imposing a 10 per cent baseline tariff on imports from all countries into the United States, including Jamaica and every Caribbean nation, potentially ending the four-decade preferential trade regime that had underpinned the region’s export sector. This edition goes to press the morning after that announcement, with its full implications still being assessed.

Gaza: Hope, Then Heartbreak

The ceasefire agreement between Israel and Hamas, announced on January 15 and taking effect on January 19, was the product of months of intensive Qatari and Egyptian mediation backed by the incoming Trump administration’s diplomatic pressure. The deal’s first phase provided for a six-week “full and complete ceasefire”, a phased withdrawal of Israeli forces from populated areas, and the release of 33 Israeli hostages — prioritising women, the elderly and the wounded — in exchange for the release of approximately 1,700 Palestinian prisoners, including 1,167 Gaza residents with no involvement in the October 7, 2023, attack that had triggered the war. Israel agreed to allow “intensive and sufficient” quantities of humanitarian aid into Gaza. Displaced Palestinians were to be permitted to begin returning to their homes.

For the first weeks of the truce, the deal held. Hostages were released in groups on schedule. Aid convoys entered Gaza for the first time in months. Displaced families moved northward toward their destroyed neighbourhoods. The scale of physical destruction — with large parts of Gaza City and Khan Younis reduced to rubble during fifteen months of intensive urban combat — became fully visible to the world for the first time as journalists and aid workers gained access. The total death count recorded by the Gaza Health Ministry exceeded 47,000. The UN estimated that reconstruction would take years and cost tens of billions of dollars.

Phase 2 negotiations — which were supposed to address a permanent end to the war, the release of all remaining living male hostages, and the long-term future of Gaza’s governance — began in February but foundered almost immediately. The fundamental gap that had resisted fifteen months of negotiations before the ceasefire had not been bridged by the ceasefire itself: Israel insisted on the right to resume operations after the hostage release; Hamas insisted that Phase 2 must guarantee a permanent end to the war before releasing the remaining hostages. On March 2, with Phase 2 talks stalled, Israel imposed a complete blockade on humanitarian aid to Gaza. On March 18, following a phone call between Trump and Israeli Prime Minister Netanyahu, Israel launched a new major offensive. The ceasefire was over. The war had resumed.

As of April 3, 2025, Gaza is once again under active Israeli military assault and total humanitarian blockade. The brief period of ceasefire delivered partial relief — hostages returned, some aid entered, some families reunited — without resolving the underlying conflict. The 33 hostages released in Phase 1 represented approximately two-thirds of the then-living hostages. The remaining hostages, most of them male soldiers or civilians who survived Phase 1’s criteria, remain in Gaza. Their status — and any prospect of a further deal for their release — is unknown at the time of publication.

The Red Sea: A Window That Opened and Closed

The Houthis’ response to the Gaza ceasefire was immediate and unambiguous. On January 19, the same day the truce took effect, the Houthi movement announced it would pause its attacks on commercial shipping in the Red Sea. By late January, the effects were measurable: Maersk Line, the world’s second-largest container shipping operator, dispatched vessels back through the Suez Canal for the first time in more than a year. The Joint Maritime Information Center confirmed it had recorded no hostile Houthi activity in the Red Sea and Gulf of Aden in the weeks following the announcement. By mid-February, the Suez Canal was registering a modest but detectable uptick in traffic, though volumes remained well below pre-crisis 2023 levels.

For Jamaica and the Caribbean, this brief window of normalisation was meaningful but incomplete. Container freight rates between Asia and the Caribbean began to decline from their elevated 2024 levels. Insurance premiums for Red Sea transits fell as underwriters reassessed risk. Import contracts that had been priced against Cape of Good Hope routing — which adds 10–14 days and significant fuel costs to Asian supply chains — began to be renegotiated. Building materials, consumer goods and industrial inputs started moving on improved economics. The region’s importers had approximately seven weeks to benefit from this improvement before it was reversed.

When Israel relaunched its offensive on March 18, the Houthi reaction was swift. The movement announced the resumption of its anti-shipping campaign, declaring that the Gaza war’s continuation voided any pause on Red Sea operations. The Trump administration responded by escalating US strikes on Houthi military infrastructure in Yemen — an intensification of the campaign that had been running intermittently since the first Trump term. By early April, the Red Sea corridor was effectively closed again for most major shipping operators, and freight rates were rising once more. The Caribbean’s brief reprieve from elevated import costs had ended almost as suddenly as it began.

Trump’s World: Panama, Tariffs and a New American Doctrine

Donald Trump’s inauguration on January 20, 2025, signalled a reconfiguration of American foreign and trade policy whose implications for the Caribbean are still unfolding. In his inaugural address, Trump devoted prominent attention to the Panama Canal, declaring that “Panama’s promise to us has been broken” and that “China is operating the Panama Canal. And we didn’t give it to China, we gave it to Panama, and we’re taking it back.” Panama’s President José Raúl Mulino rejected the characterisation forcefully and immediately, reaffirming Panama’s sovereignty over the canal. Factual corrections followed from analysts: no Chinese government entity operates the canal; two Chinese-affiliated companies, CK Hutchison Holdings and Landbridge Group, operate ports at the canal’s two ends, while the canal’s waterway itself is operated by the Panamanian state entity, the Panama Canal Authority.

The political pressure nonetheless produced rapid results. On February 23, a Panamanian court issued a ruling declaring the old CK Hutchison port concession null and void, ending a nearly thirty-year arrangement that had drawn domestic criticism for years. Panama also agreed to withdraw from China’s Belt and Road Initiative following a meeting with Secretary of State Marco Rubio. For Caribbean governments watching the episode, the pattern was instructive: Trump’s administration was prepared to exert aggressive pressure on regional sovereignty questions, and the smaller partner’s legal institutions were quickly shaped by the geopolitical context. CARICOM members, several of whom participate in China’s Belt and Road programme, were absorbing that signal.

The tariff dimension crystallised on April 2 — the final day of this reporting period. Under executive orders signed that day, the Trump administration imposed a 10 per cent baseline tariff on imports from all countries into the United States, with immediate effect for most trading partners. Jamaica and the Caribbean were not excepted. For the first time since the Caribbean Basin Initiative was enacted in 1984, Jamaican goods entering the United States would face import duties. The BOJ had anticipated in its recent communications that the first-round price impact of these tariffs would be limited, citing Jamaica’s export mix. But the structural threat was immediately clear to regional trade analysts: the CBI’s duty-free preferences, which have underwritten Caribbean export diversification for four decades, were potentially erased overnight. This edition goes to press with the full economic assessment of that change still to be made.

Ukraine: A Narrow Truce on Energy

The war in Ukraine entered 2025 under the eyes of a new American administration whose declared intention was to end the conflict rapidly. Trump’s envoy Steve Witkoff flew to Moscow on March 13 for direct talks with President Putin — the highest-level direct American contact with Russian leadership since the war began. On March 18, following a phone call between Trump and Putin, Russia announced it would pause attacks on Ukrainian energy infrastructure for a period of thirty days. The announcement was narrowly defined: it covered power generation, distribution networks and fuel storage facilities but explicitly excluded Ukrainian military positions, frontline attacks and the broader conduct of the war. Russian artillery, missile and drone strikes on Ukrainian cities and military infrastructure continued through the end of this quarter.

Ukrainian President Zelensky’s response to the Trump peace framework was to call for a complete, unconditional ceasefire with no territorial conditions attached. Putin rejected that formulation, insisting that any ceasefire must incorporate Russia’s demand for permanent neutrality for Ukraine, withdrawal from NATO aspirations, and recognition of Russian sovereignty over occupied territories. The gap between the two positions remained enormous. The Trump administration’s diplomatic framework — as articulated by Vance and Witkoff — pointed toward a territorial freeze along roughly current front lines, a formula that Kyiv found deeply difficult to accept publicly. As of April 3, 2025, the war continues in its full destructive dimensions, with the energy infrastructure truce the only concrete product of three months of intensive American diplomatic engagement.

For Jamaica and the Caribbean, Ukraine’s war continued to impose costs through global grain and fertiliser markets. The limited energy truce, while welcomed, did not affect the commodity channels through which the war reached Caribbean consumers — elevated wheat and flour prices, higher fertiliser costs for Jamaican farmers, and the general inflationary pressure of a global commodity complex operating under wartime conditions for a fourth consecutive year.

Venezuela’s Warship and the Guyana Crisis

The Venezuela-Guyana Essequibo dispute produced its most dangerous incident since the 2023 crisis on March 1, when a Venezuelan navy vessel approached the Liza Destiny, an ExxonMobil floating production, storage and offloading vessel operating in Guyana’s Stabroek Block in the country’s exclusive economic zone. The approach was widely interpreted as deliberate intimidation of offshore oil operations that represent Guyana’s most significant economic asset and a major US commercial investment. ExxonMobil and US authorities were immediately informed. The response from the Trump administration was unusually direct: Secretary of State Rubio visited Georgetown, Guyana, in late March and publicly declared that it would be a “very bad day for the Venezuelan regime” if it attacked Guyana or ExxonMobil. The US military posture toward Guyana was reviewed and reinforced.

For CARICOM and Jamaica, the episode raised concerns that went beyond the bilateral Venezuela-Guyana dynamic. Guyana’s oil revenues — which were transforming the small nation into one of the hemisphere’s fastest-growing economies and a potential source of regional financing — depended on the security of Stabroek Block operations. Any serious disruption to Guyanese offshore production would affect not only Guyana’s domestic transformation programme but the broader regional development architecture that Guyana’s windfall revenues were expected to support. The dependence on American military deterrence for the security of a Caribbean nation’s primary economic asset was itself a commentary on the limits of regional self-reliance in the current geopolitical environment.

Haiti and the Limits of International Resolve

Haiti began 2025 with the Kenya-led Multinational Security Support mission approaching nine months of operations and no measurable reduction in the gang violence that had effectively collapsed the Haitian state. Internally displaced persons numbered more than 700,000, up from 580,000 at the mission’s deployment. Gang control over large parts of metropolitan Port-au-Prince and the Artibonite agricultural region remained absolute. The MSS mission, operating at roughly 40 per cent of its intended strength due to chronic underfunding and the failure of pledging nations to deliver committed personnel and equipment, continued patrolling within the capital’s reach without the capacity to conduct sustained counter-gang operations across the territory.

CARICOM’s consistent position — that the MSS needed to be replaced or upgraded by a full UN peacekeeping operation with assessed contributions, enforceable mandates and serious troop commitments — had not produced results at the UN Security Council, where permanent member scepticism about costs and open-ended commitments blocked agreement. Jamaica’s own small deployment within the MSS — approximately 23 Jamaican security personnel among the 991 total deployed — represented the limits of what the island could contribute without prejudicing its own domestic security capacity. The Haitian crisis was not generating solutions at the pace its humanitarian dimensions demanded.

Jamaica’s Economy: Managing Uncertainty

Jamaica entered 2025 with its economy expanding modestly and its principal vulnerabilities well-known. The Bank of Jamaica held its policy rate steady at 5.75 per cent per annum, balancing inflation that remained within the 4–6 per cent target range against the external uncertainties that the new US administration was introducing on multiple fronts. The BOJ’s projected GDP growth for FY 2025–26 of 1–3 per cent reflected cautious optimism: tourism was strong, construction remained active, and agricultural output was normalising after previous weather disruptions.

The tariff announcement of April 2 changed the calculus. While the BOJ had publicly assessed that the first-round inflationary impact of US tariffs would be limited — reflecting Jamaica’s export mix and the relatively small share of Jamaican goods directly competing in US markets — the structural implications were more serious. The Caribbean Basin Initiative, which had since 1984 provided duty-free access to the US market for a wide range of Caribbean goods including Jamaican agricultural products, apparel, and processed foods, appeared to have been superseded overnight. Remittances — which account for nearly 19 per cent of Jamaica’s GDP with over 67 per cent originating in the United States — faced additional risk from the Trump administration’s aggressive immigration enforcement posture, which was creating job uncertainty and legal precarity for Jamaican communities in South Florida, New York and Connecticut.

Tourism remained the economy’s most reliable engine. The Latin American market’s rapid growth was partially offsetting any softness in traditional markets. The housing and construction sector continued to attract investment, with the real estate market in Kingston, Montego Bay and the resort parishes maintaining activity. But the quarter’s final day had introduced a variable — the 10 per cent universal US tariff — whose full economic consequences would only become clear in the weeks and months ahead.

Looking Ahead

As this edition is published on 3 April 2025, the Caribbean faces a convergence of challenges unlike anything the region has confronted since the 2008 financial crisis. The Gaza war’s resumption has re-exposed the Red Sea corridor to disruption. The Trump administration’s tariff regime has potentially ended four decades of preferential US market access. Venezuela’s provocations in Guyana’s offshore waters are escalating. Haiti’s security crisis deepens without resolution. And Ukraine’s war — entering its fourth calendar year with no end in sight — continues to distort global commodity markets that small island importers cannot escape. Jamaica’s fundamentals remain sound. But sound fundamentals have never been, by themselves, sufficient to navigate a world this unsettled.

Jamaica Homes Global Conflict & Caribbean Impact Review is published quarterly, examining how wars, geopolitical tensions and major international crises have shaped Jamaica, the Caribbean and their economies.