What the Trump-Xi Summit Means for Puerto Rico

When Presidents Donald Trump and Xi Jinping wrapped up their White House summit last week, the headline deliverables were a two-month extension of the U.S.-China trade truce and a pledge to cut tariffs on roughly $30 billion of each other’s “non-sensitive” goods.

For Puerto Rico, the more consequential trade event arrives today, and it has little to do with China.

As of Sept. 29, Section 232 tariffs on patented pharmaceuticals and their active ingredients apply to all importers other than the 17 companies that began paying on July 31, according to U.S. Customs and Border Protection guidance summarized by logistics firm C.H. Robinson.

On an island where manufacturing accounts for roughly 45% of gross domestic product (GDP), that trade regime is the story to watch.

A Caribbean Business review of federal filings, Puerto Rico Institute of Statistics (IEPR) data and Planning Board studies finds that the island’s exposure to China is smaller than most states’ on paper, larger in practice, and routed largely through channels that official statistics do not capture.

U.S. Treasury Secretary Scott Bessent announced the truce extension to Jan. 10, 2027, as Xi arrived, as widely reported. On Sept. 28, the two governments released their tariff-cut lists. The U.S. list covers 77 categories of Chinese goods, including toys, toasters, tableware, holiday decorations and children’s car seats. China’s list covers 1,619 U.S. items, from farm products and cosmetics to medical devices and coal, according to AP and Reuters.

Neither side said how deep the cuts will be or when they take effect. Leah Fahy, senior China economist at Capital Economics, told AP the average U.S. tariff on Chinese goods would fall only from about 22% to about 20.5%.

The tariff that matters most to Puerto Rico

Under the pharmaceutical proclamation, patented drugs, active pharmaceutical ingredients (APIs, the chemically active component of a medicine) and key starting materials face a 100% default tariff.

The rate drops to 15% for the European Union, Japan, South Korea and Switzerland, 10% for the United Kingdom and 20% for companies with a Commerce-approved onshoring plan. Generics, biosimilars and U.S.-origin products are exempt, according to CBP guidance and law-firm analyses.

That structure points Puerto Rico’s risk toward Europe and Asia’s pharma hubs rather than China. Ireland (4.1%) and Singapore (2.5%) were the island’s two largest foreign sources of imports in fiscal 2026, behind the U.S. mainland’s 69.6%, according to IEPR’s August statistical report to the governor.

Because the proclamation reaches ingredients as well as finished doses, plants that import patented APIs fall within its scope unless an exemption or approved onshoring plan applies.

Reshoring and components

The other China angle is reshoring, or the push to relocate American companies to U.S. soil, including Puerto Rico.

Amgen committed $650 million in Juncos in September 2025 and Eli Lilly more than $1.2 billion in Carolina a month later. Taiwan’s PharmaEssentia formalized a $46 million biopharmaceutical operation in March, according to the Puerto Rico Federal Affairs Administration, and Invest Puerto Rico reported more than $470 million in investment and 3,100 job commitments in fiscal 2025.

What Caribbean Business could not confirm is a documented case of a manufacturer moving production from China to Puerto Rico because of the trade war. The announcements are concentrated in life sciences and trace the reshoring decisions more to U.S. pharmaceutical policy and onshoring deals than to China tariffs.

China’s bigger contribution to the conversation involves inputs. Electronic-component makers import 95% of their intermediate inputs, the Planning Board found, and Beijing’s rare-earth licensing regime remains the summit’s biggest unresolved item. Chinese shipments of rare-earth magnets to the U.S. fell 13% year on year in August to 512 tons, the South China Morning Post reported, citing Chinese customs data.

The China goods nobody counts

On paper, the island’s China link is modest. Puerto Rico imported $828.6 million in goods directly from China in 2025, out of $19.1 billion in foreign imports, according to IEPR’s Aranceles en Puerto Rico 2025 study. That is about 4.3%, by CB’s calculation, less than half the national share.

Those goods carried $275.2 million in tariffs, an effective rate of 33.22% against 4.81% for all foreign imports, making China the largest single source of the island’s tariff bill.

What is far less visible to statisticians, it turns out, are Chinese goods that arrive at our store shelves and showrooms via U.S. mainland distributors, not from China directly.

With most consumer goods arriving from mainland warehouses and little local consumer-goods manufacturing, the gap between measured and actual China content in Puerto Rico is likely among the largest in the country.

Nearly seven of every $10.00 of goods entering Puerto Rico come from the mainland, per IEPR, and they arrive as domestic shipments. A Chinese-made air conditioner, drill or toy bought through a retailer’s Florida distribution center, or a component ordered by a manufacturer from a U.S. distributor, is recorded as a U.S. shipment.

How Puerto Rico compares with the states

Measured by direct imports, Puerto Rico is at the bottom tier of U.S. jurisdictions. China supplied 15.6% of California’s imports and 13.3% of South Carolina’s in 2025, according to Census data compiled by Visual Capitalist, against the island’s 4.3%.

Per resident, Puerto Rico’s direct China imports come to about $260, by CB’s calculation using Census population estimates, versus roughly $900 nationally (see table).

Routing through other states is universal. Census assigns imports to the state the importer reports, often a distribution hub, so landlocked and small states also understate their true China consumption.

Puerto Rico’s case is more extreme. With most consumer goods arriving from mainland warehouses and little local consumer-goods manufacturing, the gap between measured and actual China content is likely among the largest in the country.

On exports, the picture differs. Puerto Rico shipped $1.52 billion in goods to China in 2022, the latest full year in Census data published by the St. Louis Fed—about 1.2% of the island’s gross domestic product, against roughly 0.35% nationally, by CB’s calculation.

Later figures point to a steep decline. Dosed medicines, the island’s main export to China, totaled $246.9 million in fiscal 2026, per IEPR.

Energy, shipping and the refund question

For energy, the date to watch is Dec. 4, when Section 232 import price floors of $0.38 per watt for solar modules and $0.22 per watt for cells take effect, pv magazine USA reported.

In Puerto Rico, rooftop solar reached 1,456 megawatts of installed capacity at the end of 2025, according to the U.S. Energy Information Administration, making those price points relevant.

In shipping, USTR fees on Chinese-built or Chinese-operated vessels are suspended through Nov. 9. Trade publications SAFETY4SEA and Riviera report the truce extension pushed reinstatement back. FreightWaves notes the extension did not mention the fees. Jones Act trade with the mainland is unaffected, but foreign calls at San Juan and Ponce are exposed.

Then there is 2025’s record tariff bill of $919.7 million, up from $236.6 million in 2024, per IEPR. The U.S. Supreme Court struck down the emergency (IEEPA) tariffs that drove much of it on Feb. 20, and CBP opened a refund process in April, according to corporate securities filings. Refunds are not automatic. A 1900 statute still in the U.S. Code, 48 U.S.C. § 740, directs that duties collected in Puerto Rico, less collection costs, be paid into the island’s treasury. CB found no public accounting of how the 2025 surge, or any refunds, are handled under that provision.