Tariff Turbulence: How PNG Is Adapting to Stay Afloat

The recent announcement of tariffs by the United States on Papua New Guinea (PNG) has raised concerns about the broader implications for the Pacific region, despite the limited direct impact on PNG’s economy. According to Mark Robinson, CEO of BSP Financial Group Limited, while the U.S. is not one of PNG’s major trading partners, the blanket 10 percent reciprocal tariff imposed on many Pacific nations, including PNG, introduces a level of uncertainty that could disrupt trade flows.

Robinson pointed out that PNG’s primary exports to the U.S. include coffee, cocoa, and vanilla, which are relatively modest in scale. However, the imposition of higher tariffs on neighboring countries—such as 32 percent for Fiji and 23 percent for Vanuatu—could have significant ripple effects on PNG’s economy. These countries are key markets for BSP, and any disruption in trade could lead to meaningful economic consequences.

Despite the potential challenges posed by these tariffs, Robinson highlighted BSP’s commitment to promoting financial inclusion across the region, noting the recent launch of the Wantok Wallet. This initiative aims to provide access to financial services without necessitating a traditional bank account, and it has already seen over 40,000 activations in the first quarter of 2025.

Additionally, the broader context includes the adaptability of PNG’s trade strategy. Prime Minister James Marape has indicated that if the U.S. market becomes more challenging due to tariffs, PNG will redirect its exports to regions where trade barriers are less restrictive, emphasizing a commitment to maintaining strong trading relationships with Asia and the Pacific.

Overall, while the economic landscape presents challenges, there are encouraging signs of resilience. Papua New Guinea appears poised to navigate the shifting dynamics of international trade by leveraging new technologies and fostering strong partnerships in the region, which positions the nation for potential growth and stability amid these evolving circumstances.