The Trinidad and Tobago Chamber of Industry and Commerce is raising strong concerns following a new US executive order that increases tariffs on regional imports.
Starting August 7th, the United States will raise reciprocal tariff rates from 10 to 15 per cent on a range of goods, including those exported from Trinidad and Tobago.
The Chamber says this move marks a sharp shift away from the principles of the Caribbean Basin Initiative, a long-standing US policy that provided preferential access for Caribbean exports.
In a statement, the Chamber warns the hike could damage the local manufacturing sector and stall economic growth tied to exports. It is calling on the T&T Government and CARICOM to urgently open dialogue with Washington and to use this moment to push for a modernised and more resilient regional trade framework in today’s changing global economy.
And weighing in on the latest announcement of a hike in reciprocal tariff rates, Senior Economist and President of the College of Science, Technology and Applied Arts of Trinidad and Tobago (COSTAATT), Dr. Keith Nurse, notes that the United States is Trinidad and Tobago’s largest trading partner.
“The total trade is estimated at US$6 billion or TT$42 billion. Trinidad and Tobago actually generates a surplus in the goods trade with the United States, close to the tune of 1.6 billion.”
Dr. Nurse says while the tariff is a challenge, it is not a major one for this country.
“Forty-seven percent of our exports are exempt from the tariffs. These are our exports in oil and gas, related areas so the hydrocarbon sector, by and large. The non-exempt areas of energy exports, for example, ammonia, fertiliser, and so on, is where the impact is going to be felt.”
He points to the fact that Trinidad and Tobago is one of the largest exporters of fertilisers and other energy-related products in the world. Dr. Nurse adds that the tariff is going to have a big impact in that area, as well as on the local manufacturing sector.
“What needs to be calculated are two key areas. One is the relative tariff, not the absolute tariff. The absolute tariff is 15 percent, but really what we need to be thinking about is what the relative tariff is compared to our competitors, for example. So most Caribbean countries are at about the same, 10 percent or 15 percent, and so we are not significantly disadvantaged, because many of our competitors and comparators are also in the same range.”
Dr. Nurse says there are other areas that need to be discussed with regard to the tariff.
“What also needs to be calculated and taken into account is what is called the relative weighted tariff. In the case of Trinidad and Tobago, this is applied across the board to all of what we are exporting to the United States and so the tariff escalation there is estimated at about 4.9 percent.”
The senior economist says that in addition to merchandise and goods, there is also the market for intellectual property and services.
“The debate needs to move well beyond focusing only on goods trade, to look at services and trade in intellectual property. And in this respect, Trinidad and Tobago is a net importer from the United States when you take these other areas into account.”
These services include shipping, accounting, banking, tourism, and other commercial services.
“A country like the United States is the largest provider of trade in services, as well as trade in intellectual property. We all use US technology. We all use a lot of US software, and things like the growth of the apps market, the growth of AI are all examples of how the United States dominates in both services and intellectual property exports.”
Dr. Nurse is also a former adviser to the OECD Development Centre in Paris and a former World Trade Organization Chair at the University of the West Indies.