On top of the ones you know, products arrive on the island with mainland tariffs already baked in, plus the Jones Act cost, plus loss of investment from policy uncertainty
A purchase order signed in San Juan this week for goods arriving in December will clear customs under rules that may not exist by then.
That is not a figure of speech. Between February and July of this year, four distinct legal frameworks governed the same imports, three of them installed after a court struck down the one before it. None arrived far enough ahead for a buyer to plan around.
When assessing the true impact of President Donald Trump’s tariff regime on businesses in Puerto Rico and the states, that instability is a central part of the costs incurred by the businesses doing the ordering, a cost that never even appears on a customs receipt.
Economists have started putting numbers on it. The study that caught our attention here in the newsroom when we began this deep dive was done by the International Chamber of Commerce and Oxford Economics. It estimated that policy uncertainty reduced business investment across 10 major economies by $202 billion in 2025, roughly $74 billion of that in the United States.
KPMG’s February 2026 tariff survey found 68% of organizations delaying or postponing investments, most commonly by up to 12 months. Federal Reserve Beige Book reporting through 2025, as analyzed by the Washington Center for Equitable Growth, described companies redirecting planning away from efficiency-improving capital spending and toward tariff-cost mitigation. Away from getting better, in other words, and toward not getting hurt.
This is huge, and more so for Puerto Rico. A firm can price a 30% tariff, hedge it, and pass it along. What it cannot do is commit capital for three years against a cost structure that may be rewritten on a few weeks’ notice.
When you read the headlines
Two weeks ago, Estudios Técnicos devoted edition 44 of its Al Punto bulletin to the tariff burden, and multiple local media republished it. The underlying research, from the Instituto de Estadísticas de Puerto Rico, had already circulated widely in June in various news reports.
The figure at the center of that coverage was that Puerto Rico importers paid $919.7 million in tariffs in 2025, against $236.6 million in 2024. An increase of 289%, and the highest amount recorded since at least 2010.
Read quickly, that sounds like a severe and quantified hit. But when we took a closer look, even alongside the comparative figure in the same bulletin, it turns out to be nearly the opposite, and it fails to include the policy uncertainties mentioned above and other related angles. Nothing against Estudios Tecnicos or its methods, which accurately reported the facts the firm included in the bulletin. But as it turns out, the story is quite a bit bigger and more complicated than that.
The island’s effective tariff rate, meaning duties as a share of total import value, reached 4.81% in 2025. The U.S. effective rate hit 9.84% by December. On that measure importers here paid roughly half what mainland counterparts did.
But the $919.7 million is not the size of the island’s exposure, and the 4.81% is not evidence of relief.
The impact of mainland tariffs
Estudios Técnicos flags the limitation itself, in footnote 3. The data covers direct imports, meaning goods shipped from their country of origin. Merchandise that clears customs at a mainland port and then moves on to San Juan is recorded as an import from the United States.
The tariff on it was already assessed and paid in Jacksonville or Newark, absorbed into the wholesale price, and it is invisible to Puerto Rico’s customs data.
For a jurisdiction that imports roughly 85% of its food and whose single largest trading source is the U.S. mainland, that exclusion must be taken into account. The $919.7 million describes the portion of the bill that arrives with a customs line item. The rest arrives inside the invoice price of goods that were tariffed once already, somewhere else, before they were ever loaded on a ship.
The $919.7 million is the floor of Puerto Rico’s exposure. The larger number is the investment not being made while everyone waits to learn the rules.
The visible portion is punishing enough. Average effective rates on agricultural products, classified under NAICS 111, rose 584%, from 1.24% to 7.24%, far above the 311.1% increase for imports overall. The Instituto found the heaviest burden falling on finished metals and iron, steel and aluminum derivatives, the input categories that price construction and manufacturing. Imports from China carried the highest effective rate of any trading partner at 33.22%.
A cost that was already there
There is also a layer that predates 2025 and has no mainland equivalent.
Purdue University economists Russell Hillberry and Manuel I. Jimenez, in work summarized by the Cato Institute, estimated that Jones Act shipping requirements function as a de facto tariff of 30.6% on Puerto Rico’s maritime trade with the mainland. They put the resulting welfare burden at roughly $1.4 billion a year, with about $692 million falling directly on consumers.
Their benchmark is worth a closer look, as they calculated the cost of ordinary most-favored-nation tariffs on Puerto Rican imports at about $94 million annually.
Before a single 2025 tariff took effect, the island’s shipping regime was costing residents something on the order of seven times what conventional tariffs did.
The new tariffs did not displace that cost. They stacked on it. A mainland firm facing a higher duty on a foreign input can shift toward a domestic supplier and capture real savings. In Puerto Rico, the domestic alternative, if one is available, is likely carrying the mainland-tariff surcharge.
Four regimes, five months
Policy, that is, is not just inherently unpredictable, but it has created tariff math that most importers in Puerto Rico may not even be aware of.
The policy gyrations, by themselves, are dizzying enough. Consider this recent sequence:
On Feb. 20, the Supreme Court ruled 6-3 in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act does not authorize tariffs, invalidating the reciprocal tariff structure retroactively.
Within hours, the White House replaced it with a 10% surcharge under Section 122 of the Trade Act of 1974, raised to 15% weeks later.
On May 7, the Court of International Trade struck down the Section 122 tariffs as well in Oregon v. United States, though it limited relief to the three importers before it. Section 122 expired on its own terms July 24.
The same day, a two-tiered Section 301 regime covering 60 economies took effect.
Section 232 tariffs on steel, aluminum, copper, autos, lumber and furniture were untouched throughout and continue to expand.
Refunds are moving slowly. Only duties collected under the invalidated IEEPA authority qualify; amounts paid under Sections 122, 232 or 301 do not.
U.S. Customs and Border Protection told the trade court in March that it lacked the staff and system capacity to review roughly 53 million import entries from some 330,000 importers. Puerto Rico importers are in that queue with everyone else.
Puerto Rico is hit harder
The mainland research applies directly to Puerto Rico, for three reasons:
First, the standard hedge costs more. The common response to an announced tariff change is to pull orders forward and carry extra inventory until the picture clears. Every week of safety stock here first crosses on Jones Act vessels, so Puerto Rico pays a premium for the same defensive move, out of working capital that is generally tighter.
Second, the mitigation toolkit requires scale. Dual sourcing, tariff classification review, customs engineering and bonded warehousing all demand specialist advice and legal spend that most firms in a small-business economy like this one do not carry in-house.
Third, relief is harder to reach. Section 232 exclusion processes and Section 301 comment dockets, for example, are open to any company that files, and Puerto Rico firms can and do file. But the informal half of that work, where an industry’s case is carried into a congressional office by a lawmaker whose own constituents make the product, works differently here.
Puerto Rico’s influence with stateside legislators rests largely on a dispersed diaspora coalition to influence multiple state delegations with a high Puerto Rican population, rather than a home-state delegation with a direct constituent stake. That is a looser and slower instrument in a process where timing often decides the outcome.
Which returns us to the real cost. The $919.7 million is the floor of Puerto Rico’s exposure. The larger number is the investment not being made while everyone waits to learn the rules.
