US Tariffs Unlikely to Greatly Affect PNG Exports, Says Economist

Papua New Guinea’s economy is expected to feel only minor effects from potential US tariff increases, due to the relatively low volume of trade between the two countries, an economist has stated.

Paul Barker, head of the PNG Institute of National Affairs, said that although a proposed 10 per cent tariff on goods entering the US could influence trade, PNG’s coffee and cocoa exports are less sensitive to such price changes. “Consumers treat these items as essentials or indulgences they rarely cut back on,” he explained.

Economist Paul Barker

According to Barker, some competing countries, including Vietnam and Côte d’Ivoire, already face higher import duties in the US, offering PNG a comparative advantage. Nonetheless, he acknowledged that final tariff rates could shift after diplomatic negotiations.

Despite broader market volatility, PNG has recently seen favourable prices for key exports like cocoa, gold, and coffee. This trend, coupled with renewed production from the Porgera gold mine, has improved the nation’s fiscal position, especially as gold demand rises during times of global economic tension.

• Barker warned, however, that if the US proceeds with broader tariff hikes this July—especially targeting countries with high counter-tariffs—it could depress international demand and pose risks for PNG’s larger trading partners.

He also highlighted the challenges faced by supply chains affected by shifting tariff rules. “Uncertainty in trade policies, especially in industries where components cross multiple borders, makes business planning and operations difficult,” he said.

While declining oil prices typically support trade, Barker noted that geopolitical instability and inconsistent energy policies are sending mixed messages. “The combination of ongoing wars and policy decisions favouring fossil fuels—even amid growing climate concerns—adds to the complexity of today’s global trade environment,” he said.

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