Elizabeth Morgan | More US tariffs, but what do they mean for CARICOM countries?

So, US President Donald Trump announced on July 23-24 more tariffs on trade partners, continuing to use trade policy as a geopolitical and protectionist measure.

Since January 2025, trade with the USA has been turned upside down. Many countries thought they had legally binding bilateral free trade agreements with the USA. These free trade agreements were in most cases initiated by the USA under Republican administrations, supporting and promoting free trade, which they saw as in the USA’s interest. The USA has been a large consumer of imported goods, both as inputs to manufacturing and consumer goods. The USA has bilateral free trade agreements with 14 countries and two multi-country regional trade agreements. Countries, like those in CARICOM, traded with the USA under a non-reciprocal preferential trade arrangement, the Caribbean Basin Initiative (CBI).

With the start of President Trump’s second term in office, he turned fiercely to a protectionist and coercive trade policy utilising tariffs. This column has covered the imposition of his various rounds of tariffs since ‘Liberation Day’ on April 2, 2025.

The Trump administration imposed a 10 per cent baseline tariff on US imports from most CARICOM countries, including Jamaica. Guyana and Trinidad and Tobago had higher tariffs on their non-petroleum exports. This sets aside the CBI, which allowed non-reciprocal free trade market access for Caribbean countries, which met the US eligibility criteria, including adherence to human-rights agreements and core labour standards conventions of the International Labour Organizations (ILO). Note that the USA itself has not ratified all the ILO Core Labour Standards conventions.

Supreme Court Decision

The Trump tariffs, in their various iterations, were challenged in the US International Trade Court where they were found to be illegal. The Trump administration appealed in the Supreme Court. This highest court, in February, upheld the ruling of the International Trade Court.

The Supreme Court confirmed that under the US Constitution, it is the Congress which has the authority to apply tariffs, which are import (customs) taxes.

Nevertheless, the president used Section 122 of the US 1974 Trade Act as an emergency measure to apply another round of temporary tariffs for 150 days. These were scheduled to expire on July 24. Note that in the midst of all this tariff application, there have been some exemptions – the US tariff system is now quite complex, it seems.

To replace these Section 122 tariffs with immediate effect, the Trump administration has invoked the following little-used trade provisions:

The Smoot –Hawley Act

The Trump administration reached back to the dormant Section 338 of the 1930 Smoot-Hawley Act to impose 50% tariffs on certain goods from Canada.

Section 301 of the 1974 Trade Act (Forced Labour)

Tariffs of 10 to 12.5 per cent have been applied to goods from 60 countries, including three from CARICOM – The Bahamas, Guyana, and Trinidad and Tobago - using investigations into unfair trade practices. In this case, proving that countries failed to prohibit the importation or exportation of goods produced using forced labour.

This is very odd, as the CARICOM countries are parties to the ILO Core Labour Standards conventions which include prohibition of the use of forced labour. They all previously met US eligibility criteria under the CBI. In any case, given countries from which the USA itself imports goods, it, too, could be in danger of importing goods alleged to be produced using forced labour or in deplorable work conditions. Cases have been exposed in the past.

The situation of other CARICOM countries

This is the question. What is now the tariff status of goods exported by the other CARICOM countries, including Jamaica?

Let us point out again that CARICOM countries have an increasing deficit in goods trade with the USA. It was noted that in 2025, even Trinidad and Tobago had a trade deficit with the USA.

The USA had a trade surplus with CARICOM countries of nearly US$8 billion in 2025.

Although trade issues are addressed in the CARICOM Council for Trade and Economic Development and the Prime Ministerial Sub-Committee on Trade Negotiations, it does not appear that the heads, at their 51st Conference in St Lucia, July 5-8, considered matters related to trade with the USA, the region’s principal trading partner.

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