The price—and power—of being the tip of the spear

Inside the Reef By Joyce McClure

When Vice Speaker Tony Ada announced his run for governor with EJ Calvo as his running mate, his first theme was one every family recognizes: the rising cost of living. Speaker Frank Blas Jr. and other contenders are echoing the same promise.

Everyone wants to bring prices down. But promises are easy. The harder question is which actions are realistic and which ones are just campaign talk.

Local leaders can’t control global markets or presidential trade wars, but they can decide how those forces land at home. That’s where the difference between rhetoric and leadership begins.

The governor’s tools are limited but real. Short-term relief measures like power credits, rebates and temporary tax cuts help households stay afloat, but lasting progress comes from tackling the island’s weak points: high energy costs, scarce housing and overdependence on imports. Fixing those problems requires steady, often unglamorous work—better port management, renewable power, zoning reform and local food production. These aren’t sound bites, but they move the needle.

Trump’s return to the White House has complicated Guam’s cost-of-living picture. His administration’s new tariffs on Chinese imports, combined with the suspension of the de minimis exemption for small packages, are already adding to consumer costs. A proposed 100 percent tariff on all Chinese goods would amplify those pressures.

Understanding how Guam fits into U.S. trade policy is key to understanding why prices rise faster here than in most places.

Guam is legally outside the U.S. customs territory so federal tariffs on Chinese goods do not automatically apply to products shipped directly to the island.

Imports from China enter under Guam’s own rules, which include a 4 percent use tax on items for personal use. Merchandise imported to Guam for resale is exempted from this use tax, but retailers are subject to the business privilege tax. Those are local, not federal, charges. Goods from the mainland come in duty-free, but they still carry the cost of transport, warehousing and port fees. Those costs stack up by the time a product reaches a store shelf, giving Guam only partial autonomy over its trade destiny.

Still, Guam isn’t insulated from the ripple effects of tariffs. Many of the island’s goods are purchased through U.S. mainland distributors or importers who have already paid the federal tariffs. Those costs are embedded upstream and passed on to Guam consumers. Even products assembled elsewhere often rely on Chinese components, and global supply-chain disruptions—shipping delays, higher freight rates and fuel spikes—reach Guam quickly.

So while Guam may not incur U.S. tariff hikes directly, it often feels the economic aftershocks sooner and more acutely than the mainland. The island’s isolation, dependence on imports and limited local production mean that any increase in trade costs—tariffs, shipping or fuel—shows up faster and lasts longer on Guam’s store shelves. That insulation is not guaranteed forever—future federal policy changes could alter how tariffs apply to Guam.

Faced with these realities, some politicians talk about making Guam duty-free. The idea sounds good but it’s complicated. Customs duties and local taxes fund the government, and full exemption would blow a hole in the budget.

Security and federal oversight also limit how far Guam can go given its role as a major U.S. military base. A more practical path is targeted trade freedom: lower or waive taxes on essential goods, like food and building materials, while establishing foreign trade zones at the port and airport to defer duties on other imports. That could deliver relief without losing revenue or control.

As the campaign season heats up, candidates will compete to sound tougher on prices. Voters should listen for details. If someone says they’ll lower costs, ask how. Which imports will they exempt? How will they replace lost revenue? Will they fight for federal carve-outs or just blame Washington? Managing prices isn’t just an economic question—it’s a test of integrity and foresight.

Guam deserves honesty, not slogans, from its candidates for its highest office.

Three questions to ask every candidate about the cost of living
Everyone running for governor says they’ll lower prices. Before you believe it, ask three questions.
1.    What part of the cost of living can Guam actually control? Imported fuel and global freight rates are out of reach. Ask which costs a governor can change—power rates, housing supply, local fees or port efficiency
2.    How will you pay for the relief you promise? Credits and rebates sound nice until the bill comes due. If a candidate can’t say how they’ll fund them, the plan won’t last
3.    What’s your long game for reducing import dependence?Look for ideas about farming, renewable power, small manufacturing or trade-zone expansion. Quick fixes don’t make Guam more secure.
Bottom line: Guam’s next governor can’t stop global inflation, but they can shape how it hits the island. When you hear “I’ll lower the cost of living,” respond with “How, who pays and what happens next?” The answers will form a report card for whoever holds that office next.

Short-term relief matters, but the real goal is resilience. The island needs to produce more of what it consumes—power, food, services—so global shocks don’t translate into local crises. Farming, aquaculture and solar energy may not win headlines, but they build stability. Guam can’t opt out of global inflation, but it can blunt its impact through smarter planning and a shift toward self-reliance.

Guam has long been called the tip of the spear in America’s defense posture—a forward base for deterrence closer to Asia than to the continental United States. That phrase fits the economy too. The island is the tip of the spear in the cost-of-living war. It absorbs every hit—from shipping delays to fuel spikes—often while the rest of the country feels it later.

Being at the tip of the spear shouldn’t just mean taking hits. It can also mean leading the charge. Guam can use its position to demand smarter trade policy for territories, pioneer renewable energy and prove that small economies can innovate their way through global turbulence.

If Guam is the tip, then it should stay sharp—not as the place that absorbs America’s inflation but as the place that shows how to fight back with ingenuity and purpose.

Joyce McClure is a former senior marketing executive and former Peace Corps volunteer in Yap. Transitioning to freelance writing, she moved to Guam in 2021 and recently relocated back to the mainland. Send feedback to joycemcc62@yahoo.com 

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