(Trinidad & Tobago Guardian) Economists and other experts have agreed that T&T’s business relationship with the United States, its closest trade partner could be negatively affected based on the policies that President-elect Donald Trump’s new Government takes.
Trump, the candidate of the Republican Party, convincingly won last week Tuesday’s presidential elections in the United States.
Trump has taken a nationalist stance on the type of economic policies he intends to implement by promising to raise tariffs on imported goods, increase US oil production and keep to US manufacturers at home.
CBS News in an article on Thursday gave statistics which show that during Trump’s first term in office, his administration imposed tariffs of up to 25 per cent on more than $360 billion in products from China.
Now, Trump has said he plans to impose a 60 per cent tax on goods from China and a 10 per cent to 20 per cent levy on all of the US$3 trillion in foreign goods the US imports annually.
Economist Dr Vanus James told the Business Guardian that these developments will all impact on T&T.
“The relationship might change if Trump keeps his promise to impose stiff tariffs on all imports into the US. It might also change if the ideologues in Trump’s orbit take their usual aggressive, ideological stance on Venezuela, especially to manage their immigration challenges. If that relationship sours, our cross-border gas deals approved by Biden will not be immune,” he said.
Given T&T’s and the Carib-bean’s small size, some analysts have argued that the region has not played an important role in the United States’ economic and foreign policies over the last few years.
James argued that this is so because it all comes down to the United States’ economic interests and the irrelevance of Caribbean countries like T&T with economies that are not diversified.
“The reason the US focusses on the Middle East is that it is in both their geopolitical and economic interest. The Caribbean’s economic attraction to the world has waned sharply since the days of sugar, mainly because we have not done enough to transform our economies and our undemocratic political systems. Keep their relationships with Israel and Iran in mind, along with the competition for influence there with Russia and China. Brazil is pivoting to Russia and China but I do not see Trump’s advisors finding enough compelling reasons than in the past to shift focus to the Caribbean and Latin America.”
Bharath: joined at the hip
In an interview with the Busi-ness Guardian, former Trade Minister Vasant Bharath spoke about the importance of the United States as T&T’s main business and trade partner.
“T&T has a long-standing relationship with the Caribbean Basin Initiative (CBI). It is an open-ended relationship with no expiry date on it whereby certain products are allowed to go into the United States, free of duties. We are not sure of President Trump’s position on Caricom, we know what his position is on China. Maybe it could well be that Caricom is too small for him to have to worry about. We all know his public position on tariffs and on products coming into the United States particularly where they threaten US manufacturers. I do not think that we are in that category as a small group of countries. It’s not just T&T but the Caribbean basin. I do not think that we are large enough to trouble US manufacturers at this point in time.”
He also spoke about other initiatives that the US has with T&T such as the Caribbean Basin Security Initiative (CBSI) where the US Government has been funding a lot of anti-terrorist activities, anti-drug trafficking, anti-human trafficking and other related areas. Bharath said that it is left to be seen if Trump’s new administration will continue to keep a focus on these areas.
He said probably the “most contentious” issue as far as Trump is concerned is an initiative with regards to climate change.
“Mr Trump’s public position has been that climate change has been a hoax. And that I think he said at one time it is the greatest scam perpetrated on human beings. The question is they may consider that programme to be not important. Of course, that programme funds issues with regards to renewable energy in the Caribbean. So, we need to be cognizant about how they will treat with their position on that.”
Bharath also spoke about the Dragon gas agreement, which the Government is looking to for future growth.
“T&T has pinned the country’s economic hopes on the Dragon gas. Even in the latest budget, you would have heard Mr Imbert talking about holding strain for the next two years. However, the relationship between Venezuela and the new President is a very rocky relationship. It is a very unstable relationship. So therefore we are not certain here in T&T if the licences that have been granted to us by the United States are going to be renewed. That would put a spoke in the wheels for us in terms of generation of any forms of energy or new forms of revenue.
“Also, President Trump has been on the campaign trail and has spoken about ‘drill. Baby, drill.’ They will be drilling more oil to make themselves more self sufficient and what that means is that there will be a larger supply of oil on the world market which will eventually lower international prices.”
Given these factors, Bharath urged the Government to reflect on the future of the country’s economic policies as T&T’s economic fortunes are tied to the United States.
“Roughly 40 per cent of our exports are to the United States and another 40 per cent of T&T’s imports are from the United States. We are almost joined at the hip of the US. Our economic fortunes going forward at this point in time is tied to the economic policy coming out of the U.S. It is one of the dangers without having diversified the economy away from oil and gas. It has now come home to haunt us where the Government has been left in a place where they have very little room to manoeuvre and very little options available to them.”
Caution urge
Former finance minister who was also a former foreign affairs minister in the People’s Partnership Government, Winston Dookeran told the Business Guardian that he does not expect any significant changes in the economic or diplomatic relationship with the United States.
“Although President-elect Trump, in his ‘America First’ stance is likely to be more ‘transactional’ in his foreign economic relations, I would not expect any change in business and trade matters between T&T and the USA. Apart from the ‘hot spots’ in the region and security concerns, the strategic value of a high priority for U.S. focus on the Caribbean is small, so I will not anticipate a change in focus of U.S. foreign policy.”
Despite this, he urged T&T to be cautious as in pursuit of its own interests, the US could implement economic policies that do not align with T&T.
“However, the wider global issues – climate finance, global tax justice, and resource flows and immigration, if pursued in an American-first manner, could adversely impact the Caribbean. As such, new channels of diplomacy in US/Caribbean relations and a stronger focus on a multi aligned – no hegemony, no binary choice- foreign policy of T&T must be on the front burner.”
BILATERAL ECONOMIC RELATIONS
According to the U.S. State Department’s website on relations with T&T, the United States is T&T’s largest trading partner. In 2022, T&T exported US$5.4 billion of goods to the United States and imported US$3.5 billion of goods from the United States.
Economic agreements between the United States and T&T include a Bilateral Investment Treaty (1996), a Memorandum of Understanding Concerning Protection of Intellectual Property Rights (1994), and a Convention for the Avoidance of Double Taxation (1970). T&T’s leading exports to the United States are iron, crude oil, liquefied natural gas, and downstream energy products such as methanol and urea. Top imported products from the United States include food products, chemical products, refined petroleum, and machinery.
The US State Department’s information page also showed that the United States and T&T enjoy cordial relations, based on a shared commitment to democracy, mutually beneficial trade, energy security, and close security cooperation such as the CBSI, the U.S. Government’s regional citizen security and development programme.
It further stated that the two countries have an extradition and mutual legal assistance treaty as well as agreements on maritime cooperation and tax information exchange. the United States and T&T are partners under the U.S.-Caribbean Partnership to Address the Climate Crisis (PACC 2030), which elevates U.S. cooperation with Caribbean countries to support climate adaptation and strengthen energy security, while building the resilience of critical infrastructure and local economies to the climate crisis.