“Mauritius must act swiftly and decisively to future-proof its economy against rising protectionism and unpredictable geopolitical shifts.”

Tariff Pressure from the U.S.

A Wake-Up Call for Diversification

The announcement of a 40% tariff on Mauritian imports by the United States – though temporarily suspended – has sent shockwaves through the island nation’s economy. As Mauritius grapples with the implications of rising global protectionism, this development highlights the urgency of economic diversification, trade diplomacy, and long-term resilience planning. A new report by CARE Ratings (Africa) offers an in-depth analysis of the challenges and strategic opportunities ahead.

The recent tariff announcement by the United States has sent ripples through Mauritius’ export-driven economy, underscoring the vulnerabilities of relying heavily on preferential trade access to major markets.

Earlier last month, under the administration of President Donald Trump, the U.S. government unveiled a 40% tariff on imports from Mauritius. This sudden policy shift has stirred significant concern, particularly given that the United States accounted for 10.1% of Mauritius’ total exports in 2024. Fortunately, the enforcement of this tariff has been temporarily frozen for 90 days, offering a critical window for diplomatic engagement and strategic response.

For over two decades, Mauritius has benefited from the African Growth and Opportunity Act (AGOA), which has allowed duty-free access for a wide range of goods, including textiles and agricultural products. However, the newly proposed tariff casts doubt on the future of these privileges. The most immediate concern lies with Mauritius’ high-value exports of animals and animal products – particularly non-human primates used in biomedical research, a niche where Mauritius plays a critical global role. These exports represent more than half of Mauritius’ trade with the U.S.

The imposition of a 40% tariff could deal a severe blow to Mauritius’ global competitiveness, especially in the apparel and seafood processing industries. Mauritius may also suffer indirect consequences from broader U.S. protectionist measures, such as increased tariffs on Chinese goods, which could disrupt global supply chains and indirectly affect Mauritian manufacturers integrated into these networks.

“The 90-day tariff suspension should be used strategically to lobby for permanent exemptions and to push for a more favourable trade arrangement.”

The stakes are high. A decline in exports would translate into job losses in key sectors, including animal breeding, textiles, and processing industries. Meanwhile, Mauritius’ financial services and tourism sectors also face collateral risks. Rising global uncertainty and protectionism could lead to reduced foreign direct investment and a stronger U.S. dollar, which would weaken the Mauritian rupee. This, in turn, would drive up import costs and inflation. High-end tourism, another vital revenue stream, could also be hurt by reduced demand for luxury travel in a slowing global economy.

Mauritius now faces a two-pronged challenge: to mitigate the immediate fallout while building long-term resilience. The 90-day tariff suspension should be used strategically to lobby for permanent exemptions – especially for biomedical exports – and to push for a more favourable trade arrangement, either through an expanded AGOA framework or a tailored bilateral deal.

Beyond the short-term measures, the crisis signals a broader need for structural transformation. Mauritius must accelerate its efforts to diversify its economy by investing in agri-tech, renewable energy, and high-value manufacturing. This transition will require policy incentives such as tax breaks, research and development funding, and a stronger emphasis on STEM education to cultivate a technology-oriented workforce.

In parallel, Mauritius should deepen its regional and international trade partnerships –especially under the African Continental Free Trade Area (AfCFTA) and with key Asian economies – to reduce its dependency on Western markets. Leveraging its strategic location and skilled labour force, the island nation is well-positioned to reposition itself in global trade.

The tariff scare is more than a policy dispute; it is a wake-up call. Mauritius must act swiftly and decisively to future-proof its economy against rising protectionism and unpredictable geopolitical shifts.

Source: CARE Ratings (Africa) Private Limited, “US Tariff Implications on Mauritius – April 2025”