Business and Economic Commentary by Christopher Ram
Introduction
The contrast could not be starker: As Guyana continues to offer American oil giants ExxonMobil and Hess some of the most generous terms in the global petroleum industry, US President Donald Trump is crafting trade policies that could devastate the Caribbean’s traditional export sectors.
Trump’s latest trade offensive goes far beyond his previous actions against major trading partners like China, Canada, and Mexico. After successfully pressing Colombia and Guatemala into trade concessions, he now targets the fundamental tools developing economies use to build their industries – including the Value-Added Tax (VAT) system that underpins Caribbean government revenues.
Immediate challenges
For the business community, three aspects of Trump’s new approach demand immediate attention:
First, his team is examining not just tariffs but entire national economic systems – including tax policies, industrial subsidies, and exchange rate management. His senior trade counselor, Peter Navarro, has specifically criticised VAT systems like those used throughout CARICOM as “trade exploitation,” suggesting they could face American countermeasures.
Second, Trump’s declaration that “if you build your product in the United States, there are no tariffs” reveals a puzzling blind spot toward services – a sector that dominates modern economies. This manufacturing-centric view raises questions about how digital services, financial products, and tourism might fare under Trump’s latest proposed regime.
Third, and most concerning for Caribbean businesses, is the April 2 deadline set by commerce secretary nominee Howard Lutnick for implementing these sweeping changes. This compressed timeline leaves little room for the diplomatic negotiations typically used to resolve trade arrangements and disputes.
The Vulnerability of CARICOM
For Caribbean enterprises, the Common External Tariff (CET) – long considered a shield for regional development – could become their greatest liability. Under Trump’s expanded criteria, this cornerstone of CARICOM economic policy could trigger retaliatory U.S. tariffs, creating a difficult choice between regional integration and access to American markets.
The implications for Guyana’s business sector are particularly complex. While the oil sector enjoys unprecedented benefits, gold, seafood, sugar, and rice exporters face a double threat: potential U.S. tariffs on their products and additional penalties triggered by the development policies designed to support them.
Consider a rice exporter: Not only might they face higher tariffs on their U.S. shipments, but government programmes supporting their industry – from preferential financing to export promotion – could be deemed “unfair practices” under Trump’s new framework.
Business Impact and Response Options
Caribbean businesses need to prepare for multiple scenarios:
Direct export challenges: Companies selling to the U.S. should model the impact of potential tariff increases and explore market diversification strategies.
Supply chain disruption: Firms relying on U.S. imports may need to identify alternative suppliers or pass increased costs to consumers.
Regulatory compliance: Businesses benefiting from government support programmes might face scrutiny under the new U.S. criteria.
The absence of a coordinated regional response is particularly troubling. While individual companies can take defensive measures, the broader threat to Caribbean economic integration requires collective action. CARICOM’s Council for Trade and Economic Development (COTED) needs to develop a comprehensive strategy that protects both regional businesses and the integration framework they depend on.
A time to act
Given the stakes involved, the current silence from both Shiv Chanderpaul Drive as well as Robb Street is worrying. With political appointees occupying key diplomatic posts and career trade negotiators sidelined, the private sector may need to be more active in defending its interests.
The coming weeks will test both the resilience of Caribbean businesses and the strength of regional economic integration. As Trump’s trade offensive unfolds, the cost of inaction could be devastating for companies that have built their success on access to U.S. markets and regional cooperation.
The April 2 deadline leaves little time for Caribbean governments and businesses to adapt. President Ali and other CARICOM leaders must urgently address both the immediate threat and longer-term implications for regional economic integration.
For the business community, waiting for their government to act may be both inadequate and too late. Forward-thinking companies must assess their tariff vulnerabilities, diversify their markets, document their trade compliance, and build coalitions to advocate for their collective interests.
