Welcome to The Bay Street Brief!

Trump just slapped a tariff onto our exports and Fitch is side-eyeing the government's surplus math.

Let's get into it.

The US has slapped The Bahamas with a fresh 12.5% tariff on exports headed stateside, and it's got nothing to do with rum, salt, or crawfish season. It's about forced labor.

United States Trade Representative Jamieson Greer announced this week that 60 countries, including The Bahamas, are getting hit with new tariffs for failing to properly ban and enforce the importation of goods made with forced labor. The order came straight from President Trump, and it followed two rounds of public hearings and more than 2,100 public comments before anyone signed off on it.

Why now?

Greer's office says this isn't really about The Bahamas specifically. It's part of a much bigger crackdown Washington has been building for months, going after any trading partner it says isn't pulling its weight on forced labor enforcement. The US has had its own forced labor import ban for almost a century, and the administration wants everyone else playing by the same rules, or paying for it.

The timing still stings. This lands right as global oil prices are spiking and Bahamian businesses are already bracing for a bumpier second half of the year.

The details

Here's the part that should actually get your attention: The Bahamas had a genuinely good run of exports to the US last year. Third quarter 2025 exports came in at just over $110.9 million, up from $84.2 million the year before. Total exports to every country combined hit $128 million for the quarter, a 19% jump. Machinery and transport equipment, manufactured goods, and food made up more than half of that total.

A 12.5% tariff on top of that pipeline isn't nothing. It makes Bahamian goods less competitive on US shelves overnight, squeezing exporters' margins on that side of the border rather than raising prices here at home. Local exporters don't have the deep pockets to absorb that kind of hit quietly, so the effect will likely show up in shrinking orders or thinner profits before it shows up anywhere else.

The government's response so far has been measured. The Office of the Prime Minister put out a statement saying it's "reviewing" the impact and is in touch with US counterparts to make sure recent Bahamian legislative measures are "fully considered." Translation: they're hoping this gets sorted through conversation, not confrontation.

The bottom line

This isn't a Bahamas specific punishment. It's one piece of a sweeping global trade move that swept up 59 other countries too. But that doesn't make the bill any smaller for the exporters here who now have to eat the extra cost or pass it on.

School soon opens back up so let’s see how many of y’all need to go back with the kids.

Solve this dead easy BGCSE question:

Two business partners, Mr. Johnson and Mrs. Lockhart, split their profits in a 5:6 ratio. This year the business brought in $26,400 in profit.

How much is Mr. Johnsons' share?

Check the bottom of the newsletter for the answer.

Remember when the government told us 2026-2027 was going to be a surplus year? Fitch Ratings looked at the numbers and said, bey no jred.

The credit agency is now predicting a $64m deficit instead of the $223.1m surplus the Davis administration has been promising. That's a $287m gap.

To be fair, Fitch isn't saying the government's cooking the books. It actually gave The Bahamas credit for "strong governance" and said the country has outperformed expectations before. But it also flagged that more than half of all government debt now has to be refinanced within a year, way more than the government planned for.

Long story short, the government may be leaning on short-term borrowing more than it's advertising, and the fallout's already showing up. Colina reportedly suspended health insurance coverage for the security services over unpaid premiums north of $100m, and the government is said to owe Bahamian companies $242m in arrears from last year alone.

Naturally, the Opposition had something to add, calling it proof the government's numbers are "wishful thinking." The government's side says its fiscal progress keeps getting "under-estimated" and that it stands by its projections. Make up your own mind on that one.

If Fitch's number holds up, there's no extra $223m sitting around to cushion debt repayments or beef up reserves, and the government would likely need to borrow more than the $1.024bn it's already planned just to close the gap. The one silver lining: total debt as a share of the economy is still expected to keep falling, down to roughly 66% by 2027-2028.

So why should you care? A $287m gap between what's promised and what's likely determines how much room the government has for healthcare, subsidies, or relief, especially if oil prices keep climbing and squeeze things further.

💰 Retirement planning might finally become mandatory. The Securities Commission is reviving a 20-year-old push requiring private employers to set up pension plans for workers, aiming to grow Bahamian capital markets and retirement savings at once.

🌿 Medical cannabis licensing is still on pause. The Cannabis Authority missed its own June target to open applications, saying it would rather "measure twice, cut once" than rush a rollout it only gets one shot at.

⛴️ Grand Bahama tour operators just got graded, and some failed. Carnival cut about 20% of its Celebration Cay shore excursions after weak guest reviews and sales, a wake-up call as more cruise competition heads to the island.

🍔 RIP to VIP movie theater snacks. Applebee's has officially closed its Fusion Superplex location on Gladstone Road, ending its run as the spot where you could grab wings while watching a movie in a recliner.

🚽 Nassau's pipes need serious help. A new IDB report says The Bahamas needs up to $300m to fix failing sewerage systems, with only 10% of New Providence actually connected to piped sewerage in the first place.

🏥 Doctors Hospital is getting a facelift. The BISX-listed provider is putting $44m into renovating its Collins Avenue flagship, finishing a new Grand Bahama hospital, and opening a Village Road imaging center, all within the next 12 to 18 months.

🛢️ Oil just blew past $100 a barrel. Houthi militants attacked two Saudi tankers headed for the Bab el-Mandeb Strait, threatening a second key Middle East shipping route after Hormuz. Trump warned of "major military punishment" for future strikes, as prices extended their climb from $72 earlier this month.

🌎 The US just tariffed almost everyone. New levies of 10% to 12.5% hit 99% of US imports at midnight, replacing a stopgap 10% tariff after the Supreme Court struck down Trump's original "Liberation Day" plan. The justification: inadequate enforcement of forced labor import bans.

🤖 An AI model broke out of its own test. OpenAI says two of its models, testing their ability to pull off a cyberattack, escaped their sandbox and hacked into rival company Hugging Face's systems to steal answers. OpenAI called it "unprecedented." Experts are calling it a warning shot.

🇬🇧 Britain has a new prime minister, again. Andy Burnham became the UK's seventh PM in a decade after meeting King Charles III, pledging a 10-year plan to "build a new economy" and ease the cost of living crisis in his first speech.

In its final days, The Reef tried everything to stay afloat. New menus. New management. Even a promise they got rid of all the rats (for real this time).

But you know what they didn't try? Advertising with The Bay Street Brief.

Your brand could be here. Unlike The Reef, you still have time. Reply to this email to advertise with The Bay Street Brief. 🇧🇸

$12,000.

How’d you do? Reply to this email, and be honest👀

Enjoy the Brief? Share it.

Send this to someone who needs it in their life.

That's all for this week. Check us out on our socials for updates throughout the week.

Got a tip, a correction, or just want to say hey? Reply to this email. We read every single one.

Until next time.

— The Bay Street Brief Team