Caribbean countries ensnared in latest Trump import tax net

Faced with the prospect of American and European Union visa restrictions - some of which are already coming into force- a handful of Caribbean nations are now confronted with the economically-dislocating reality of increased tariffs on their exports to the US.

Four countries in the region - the Bahamas, Dominican Republic, Guyana, and Trinidad and Tobago have been slapped with a 10 to 12.5 per cent import tariff by the Trump administration as part of a wider net that ensnares 60 countries including the United Kingdom.

The US government says the punitive action, which comes just as previous global punitive import tariffs were expiring, was to “impose and effectively enforce a prohibition on the importation of goods produced with forced labour”.

It also comes after the US government was forced by the country’s Supreme Court to refund around US$81 billion it had collected, ruling that the earlier Executive Order signed by President Trump earlier this year was illegal.

This latest move has been viewed with surprise and scepticism by many of the targeted countries.

The chairman of the UK’s Business and Trade Committee, Member of Parliament Liam Byrne, commented: “Our Committee warned of precisely this danger. That’s why we recommended an urgent update to the Modern Slavery Act to ensure we have in place comprehensive import bans on goods made with forced labour, which is a step that might have helped shield Britain from these tariffs.”

He also noted: “These tariffs should surprise no one. They replace an almost identical set of measures (that expires 24.7.26). The form may change, but the threat remains. The truth is that mercurial American trade policy now demands robust Government support for our business community, which cannot be left trying to navigate this uncertainty alone.”

CARIBBEAN NET

The inclusion of Trinidad and Tobago, whose prime minister Kamla Persad-Bissessar is a staunch Trump ally, was seen as unexpected by some observers.

For the Caribbean countries targeted by the new tariffs, Trinidad and Tobago is the only one at the lower end of the spectrum at 10 per cent, while the other have been slapped with the 12.5 per cent rate.

The T&T government has sought to clarify how the new Trump tariffs relate to the country. “The Ministry of Foreign and CARICOM Affairs wishes to categorically state that the United States of America has not applied any new tariffs on exports from Trinidad and Tobago,” it said in a statement.

“Under the direction and leadership of the Honourable Prime Minister Kamla Persad-Bissessar, the Government of Trinidad and Tobago took immediate steps to ensure that the 12.5% proposed tariffs on Trinidad and Tobago’s exports to the USA were not applied,” it stated, adding that “specifically, the Honourable Prime Minister instructed that legislation be brought to the Parliament to prohibit the importation of goods produced from forced labour into Trinidad and Tobago.”

Meanwhile, in the wake of the new tariffs, the Bahamas government said: “We are engaging our United States counterparts to seek clarification and to ensure that recent legislative measures taken by The Bahamas are fully considered…and we will continue working constructively toward a fair resolution that protects Bahamian businesses and maintains the strong trade relationship between our countries”.

TARIFF TARGETS

It has also been noted that the countries in the new wave of Trump tariffs have mostly been hit with the higher 12.5 per cent level, along with several Latin American countries and larger economies such as China and EU member states.

The new wave of tariffs accounts for almost all American imports from the targeted countries but excludes oil and gas, copper, chip-making machinery, chemicals, and diamonds. Unlike the previous set of import taxes, which were struck down by the Supreme Court and for which the US government was ordered to repay American importers, the current exclusions have been structured to exempt specific US industries and consumer groups from having to pay the duties this time around. Among the industry sectors specifically exempted are the tech sector, especially chip manufacturers, oil and gas, and some other heavy industries.