As international trade tensions ramp up, the construction supply sector is facing the prospect of proposed port fees for shipping companies of up to $1.5 million per call for vessels built or flagged in China.

It would drive up the costs for importers.

“I can't absorb the cost. We sell building supplies. It isn’t a high margin business,” said Sascha Bearden, the owner of Baptiste Ltd, a key construction supplies distributor.

Higher prices aren’t the solution, either. “There’s sort of a certain price point that people will pay for a product, and you just simply can't sell it for more than that. People would either go without. I mean, it’s not like milk, eggs and bread.“

In the past, manufacturers have relocated to circumvent previous tariffs, she said. But that won’t work this time.

“What happened was a lot of kitchen cabinets and furniture was made in China. When President Trump was first in office, he introduced tariffs on exactly that. So what they did was all these companies just pivoted to manufacturing in Vietnam or somewhere else,” she said.

“Our in-stock kitchen cabinet line is made in Vietnam to avoid the tariffs. Well, now he’s put tariffs on Vietnam.”

Baptiste is investigating alternative sourcing, with Ms Bearden’s gaze in particular, turned south. “We can pretty quickly pivot to Mexico,“ she said. ”There’s a lot of great manufacturers down there that we could get plumbing and electrical from,“ she noted.

However, she added that transportation logistics pose headaches. “The problem starts becoming the freight, right?

“Because buying out of Florida, the container rate is really good. But once you start buying from Canada, now you need to start doing an intermodal rate.

“You'd have to pay trucking from Canada to the US East Coast, that starts adding thousands to a container.”

Large US distributors also offer economies of scale that Canadian suppliers cannot match, she said.

“They’re huge, and they have buying power with so many different manufacturers that we couldn’t buy enough from them at a time,” she explained. “And then I have to buy a container of bathtubs and a container load of tools just to make it worth my while and then I end up sitting on it, so it’s not great for cashflow.”

The company is exploring other logistics hacks, including using bonded warehouses.

“Some of our product comes in-bond, so it might be made in Mexico, but it sits in-bond in Florida on its way to us, so that’ll never attract a tariff,” Ms Bearden explained.

Fortunately, Baptiste Ltd maintains some insulation from potential disruptions.

“Our windows and doors are all made in the US. Our tile comes from Europe. A lot of our housewares come from Europe,” she said.

With Bermuda’s population, the economic stakes are particularly high, but Ms Bearden admitted there’s not a lot local government can do to mitigate them.

“Look, there's 60,000 of us sitting on a little rock in the middle of the Atlantic. I mean, we probably have as much sway as penguins do on the islands,” she remarked.

But as trade tensions continue, local enterprises will survive, she said. “We'll adapt. We certainly can’t afford our prices to go up by 25 to 50 per cent across the board. Because, I mean, imagine what that would do for inflation here in Bermuda. It's already an expensive place to live.

“I think all of us, like all of the retailers in Bermuda, if the tariffs last, we’ll all start pivoting more towards Europe, Canada, Mexico, or figuring out ways of doing stuff in-bond through the United States."