Elizabeth Morgan | The continuing US Trump tariffs saga

WELL, US unilateral Trump tariffs continued to be in the news as the CARICOM Heads of Government Conference was in progress in Montego Bay, as well as the BRICS Summit in Rio de Janeiro, July 6-8. The 90-day suspension for implementation of his reciprocal tariffs is scheduled to end today, July 9. Recall that tariffs, as previously explained, are import taxes paid in the importing country, in this case the USA. While generating revenue, tariffs can also fuel price increases and contract trade. President Trump has also proposed imposing higher tariffs on trans-shipped goods.

The US president announced that commencing on Monday, July 7, letters would be sent out to about 90 countries informing them of new tariff rates set unilaterally by his administration. Note that his original reciprocal tariffs list had 54 countries. Clearly, others subject to the 10 per cent baseline tariff would be included to arrive at 90. In advance of July 9, the president also informed of a new deadline of August 1 for tariffs implementation, thus, another extension of the deadline. In addition, President Trump also announced a new 25 per cent tariff on South Korea and Japan to become effective on August 1. Apparently, Japan and South Korea were the first of 14 countries to get their letters. A new trade presidential executive order was signed on Monday, of course, under emergency legislation.

It is assessed by analysts that not many negotiations were concluded with countries before today’s deadline. There should have been 90 trade deals in as many days, or at least with the US’s 18 main trading partners. From the president’s announcements, there were only negotiations of some sort concluded with the United Kingdom, China, and Vietnam, and these seemed to be framework agreements. It is reported that the US was also in negotiations with the European Union, Japan, and India, and should have started negotiations with Canada following the G7 Summit.

Be reminded that some of these countries already have legally binding bilateral free trade agreements with the USA, approved by Congress and notified to the World Trade Organization (WTO).

BRICS AND TRUMP TARIFFS

It was reported that the BRICS bloc, at their summit on Sunday, issued a statement expressing serious concerns about increased unilateral tariffs which are inconsistent with the rules of the WTO, and which are threatening to reduce global trade, disrupt global supply chains, and introducing uncertainty. The BRICS statement did not mention President Trump.

The US president responded, threatening that without exception, any country aligning themselves with the anti-American policies of the BRICS would be charged an additional 10 per cent tariff.

Note that the USA has been in trade negotiations with India and China, leading members of the BRICS.

This US tariffs policy becomes more arcane with each announcement.

CARICOM AND TRUMP TARIFFS

As known, all CARICOM countries had the baseline 10 per cent tariff applied. Guyana, for some inexplicable reason, had a reciprocal tariff of 38 per cent applied on non-petroleum products, which was suspended to today. Thus, Guyana would clearly be expected to be among countries getting a letter. Articles from the Stabroek News newspaper in Guyana inform that the government of Guyana has been in discussions with the Trump administration on the increased US tariffs since April. The president of Guyana said then that his country and the USA had a dynamic partnership and were working together to arrive at an amicable solution. Guyana, like other Caribbean countries, traded with the USA under the non-reciprocal Caribbean Basin Initiative approved in legislation by the US Congress.

Stabroek News on Monday reported that President Ifraan Ali intended to raise the issue of the US tariffs at the CARICOM Heads Conference.

Note that in 2018, the USA had a trade surplus with Guyana. The US exported goods valued at US$541 million to Guyana and imported goods valued at US$253 million. The US thus had a surplus of US$288 million. Prior to 2018, the USA consistently had a trade surplus with Guyana.

With Guyana beginning to export petroleum products to the USA, the US surplus situation was reversed to a deficit since 2020. A US firm, Exxon Mobil, is mining petroleum in Guyana.

A 38 per cent reciprocal tariff on Guyana’s non-petroleum exports is incomprehensible.

The CARICOM region as a whole has had a trade surplus with the USA for years. It would not be surprising, however, to hear that other CARICOM countries have also received letters from the Trump administration announcing new tariffs or confirming its existing tariffs.

From the statements at the opening ceremony on Sunday, CARICOM heads are clearly aware of the situation unfolding around them, and the challenges posed to the region of small island developing countries by changing policies in the USA. By the time this article is published, we should know whether this mercurial US tariff policy was considered by the heads. We will also know where the region stands with these US tariffs.

Of course, as it relates to US policies affecting the region, besides trade, the CARICOM heads also had to consider immigration; security, including Haiti; development assistance; climate change; and other multilateral issues.

Elizabeth Morgan is a specialist in international trade policy and international politics. Send feedback to columns@gleanerjm.com.