Com­pa­nies in T&T and across the re­gion are in the mon­i­tor­ing stage, fol­low­ing last Wednes­day’s an­nounce­ment by US Pres­i­dent Don­ald Trump of the im­po­si­tion of sweep­ing tar­iffs on the prod­ucts of all com­pa­nies in coun­tries ex­port­ing goods to the US.

The Trump ad­min­is­tra­tion im­posed a base­line ten per cent im­port tar­iff on all goods en­ter­ing the Unit­ed States, which came in­to ef­fect on Sat­ur­day, in­clud­ing from long-stand­ing part­ners such as T&T.

Rudy Ram­per­sad, vice pres­i­dent of re­gion­al ini­tia­tives at Ramps Lo­gis­tics, told Sun­day Busi­ness Guardian that every­one is still in an ex­plorato­ry stage to fig­ure out the full im­pact.

Ram­per­sad said the com­pa­ny ex­ports a lot of fin­ished man­u­fac­tured prod­ucts for clients such as pack­et spices, sea­son­ings, pep­pers, and then fin­ished prod­ucts like soft drinks and snacks.

He not­ed that, in terms of the ocean freight side, the com­pa­ny does not see any im­pact on the ship­ping and lo­gis­tics part at this time.  

“I know in terms of com­mer­cial set­up, there may be a com­mer­cial agree­ment be­tween the sup­pli­er and the end cus­tomer. But I know based on the ten per cent tar­iff, that will be ap­plic­a­ble based on the im­porter in­to the US,” Ram­per­sad ex­plained.

At the Na­tion­al Flour Mills (NFM) chief ex­ec­u­tive of­fi­cer Ian Mitchell said the com­pa­ny does ex­port to the US and it has a dis­trib­u­tor in the New York area. The prod­ucts NFM ex­ports are spe­cial­ty prod­ucts such as pholourie mix­es and some bak­ing pow­der that Caribbean peo­ple pur­chase and use.

Mitchell be­lieves the tar­iff is go­ing to in­crease the cost of those items to the end users but be­cause of the emo­tion­al con­nec­tion to its brand NFM, there should be no loss of sales vol­ume.

He added that as the NFM looks to in­tro­duce oth­er prod­ucts in the US, the com­pa­ny will have to ex­am­ine what the tar­iff im­pact will be go­ing for­ward.
And, SM Jaleel’s group val­ue chain man­ag­er, Amir Ho­sein, said the prod­ucts fall un­der the new US tar­iff reg­u­la­tions and so the im­po­si­tion of the ten per cent tar­iff im­pacts the port­fo­lio of its brands of drinks en­ter­ing the Unit­ed States.  

“There will be a di­rect im­pact on the cost struc­ture of our prod­ucts ar­riv­ing in the USA and there­fore there is the pos­si­bil­i­ty of an im­pact on prices on shelves for shop­pers in the US mar­ket. We are ac­tive­ly re­view­ing our sup­ply chain and pric­ing strate­gies to min­imise any dis­rup­tion and con­tin­ue de­liv­er­ing qual­i­ty and val­ue to our con­sumers. We re­main com­mit­ted to nav­i­gat­ing this evolv­ing trade land­scape,” Ho­sein dis­closed. 

Asked if the non-al­co­holic bev­er­age com­pa­ny would be look­ing at ways to mit­i­gate costs trick­led down to the con­sumers, he said “We con­tin­ue to dri­ve ef­fi­cien­cies in op­er­a­tions, op­ti­mis­ing our sup­ply chain and main­tain­ing a ro­bust net­work of sup­pli­ers. For ex­am­ple, we ex­pect to get sup­port from ship­ping lines to re­duce the cost of freight in trans­port­ing our bev­er­ages to the var­i­ous US ports to which we ship. These ef­forts are part of our on­go­ing strat­e­gy to en­sure val­ue, re­li­a­bil­i­ty, and ex­cel­lence across all our mar­kets, in­clud­ing the USA.” 

On whether the US is the com­pa­ny’s biggest ex­port mar­ket, Ho­sein not­ed that though the USA is an im­por­tant mar­ket for SMJ, it is not its largest.  

“Ex­ports across both the Cari­com and US mar­kets con­tin­ue to grow. The com­pa­ny con­tin­ues to ex­plore free trade agree­ments and part­ner­ship op­por­tu­ni­ties in ex­port mar­kets to dri­ve the avail­abil­i­ty of our brands across var­i­ous coun­tries. We aim to make our prod­ucts ac­ces­si­ble to more con­sumers glob­al­ly while con­tribut­ing to the growth of re­gion­al trade and earn­ing valu­able for­eign ex­change.” 

Sun­day Busi­ness Guardian reached out to en­er­gy com­pa­nies who ex­port petro­chem­i­cals, but they de­clined to com­ment un­til more in­for­ma­tion is forth­com­ing on the is­sue.

The Cari­com Pri­vate Sec­tor Or­ga­ni­za­tion (CP­SO) Tech­ni­cal Team in a state­ment last Fri­day said the sweep­ing tar­iff im­pacts sev­er­al Caribbean coun­tries in­clud­ing St Lu­cia, the Do­mini­can Re­pub­lic, T&T, the Ba­hamas, Grena­da, St Kitts and Nevis, Guyana, Haiti, Sint Maarten, Suri­name, Be­lize, British Vir­gin Is­lands, Bar­ba­dos, Cay­man, Cu­ra­cao, Bermu­da, Turks and Caicos, Aru­ba, St Vin­cent, Montser­rat, Guade­loupe, Mar­tinique, Do­mini­ca, An­guil­la, and An­tigua and Bar­bu­da. These coun­tries have been as­sessed at a ten per cent tar­iff, but Guyana faces a high­er “rec­i­p­ro­cal” tar­iff of 38 per cent.

CP­SO CEO and tech­ni­cal di­rec­tor Dr Patrick An­toine ac­knowl­edged that these tar­iffs would im­pact Cari­com economies, but he main­tained that cred­i­ble analy­sis need­ed to be un­der­tak­en be­fore a com­pre­hen­sive re­sponse is pro­vid­ed.  

“Sev­er­al di­men­sions have now be­come im­por­tant,” Dr An­toine said.  

“The mea­sures will have both di­rect and in­di­rect im­pacts on Cari­com economies, be­gin­ning with ex­ports, but rapid­ly on im­ports as well. In the case of im­ports, some of which are rout­ed through the US to ful­fil re­gion­al mar­kets, the im­pact of the tar­iffs will be felt through high­er prices—in a fair­ly rapid man­ner. But the im­pacts will al­so be felt sec­tor-wide, agri­cul­ture, tourism, man­u­fac­tur­ing etc. There will al­so be an im­pact on US con­sumers and the US econ­o­my, and this will have very neg­a­tive im­pli­ca­tions on the re­gion’s trade in Ser­vices, par­tic­u­lar­ly tourism.  

“The CP­SO analy­sis will al­so look at the im­pact of the US tar­iffs from the per­spec­tive of op­por­tu­ni­ties for the pri­vate sec­tor—not sole­ly from the per­spec­tive of chal­lenges.”

Da­ta from the White House states a 2024 eco­nom­ic analy­sis found that a glob­al tar­iff of ten per cent would grow the US econ­o­my by US$728 bil­lion, cre­ate 2.8 mil­lion jobs, and in­crease re­al house­hold in­comes by 5.7 per cent.

Pres­i­dent Trump’s first-term steel tar­iffs led to thou­sands of jobs gains in the met­al in­dus­try, along with wage in­creas­es, the White House said. The tar­iffs were hailed as a “boon” for Min­neso­ta’s iron ore in­dus­try, with state of­fi­cials cred­it­ing them for bol­ster­ing the lo­cal econ­o­my.

How­ev­er, the Min­istry of Trade and In­dus­try in a re­lease on Thurs­day said that this coun­try’s ex­ports have not been dis­pro­por­tion­ate­ly dis­ad­van­taged as the low­est rec­i­p­ro­cal tar­iff rate has been ap­plied to T&T.

The min­istry said T&T’s ex­ports to the Unit­ed States and the rest of Cari­com’s ex­ports (ex­cept Guyana) have been giv­en the min­i­mum dis­count­ed rec­i­p­ro­cal base rate of 10 per cent.  

This, it said, vast­ly dif­fers from oth­er rates ap­plied to many coun­tries glob­al­ly which range from ten to 50 per cent.  

To help the pub­lic un­der­stand the tar­iff im­po­si­tion, the min­istry un­der­scored that some of T&T’s largest ex­port com­modi­ties to the Unit­ed States (such as crude pe­tro­le­um and nat­ur­al gas) will NOT be sub­ject to the rec­i­p­ro­cal tar­iff.

In a news con­fer­ence on Thurs­day Guyana’s vice pres­i­dent, Bhar­rat Jagdeo be­lieves dif­fer­ences in trade fig­ures sup­plied to the Unit­ed Na­tions Com­mod­i­ty Trade Sta­tis­tics Data­base (UN Com­trade) pro­vide suf­fi­cient room to re­quest the Unit­ed States (US) to low­er its 38 per cent tar­iff on im­ports from this coun­try.

He hoped the dif­fer­ences in da­ta “hope­ful­ly can re­sult in a low­er tar­iff”.

“There is room to work with our US part­ners to clar­i­fy.”

Jagdeo said Guyana sub­mit­ted sta­tis­tics to UN Com­trade show­ing that for 2024, the coun­try’s ex­ports to the US were worth US$3.3 bil­lion and im­ports from that North Amer­i­can coun­try to­talled $799 mil­lion.”

Box

The ques­tion that is be­ing asked all over the world is what do these tar­iffs mean for their cus­tomers in the long run.

Many ques­tions have arisen on what a tar­iff is. It is a tax that a gov­ern­ment places on goods and ser­vices im­port­ed from oth­er coun­tries.  

When prod­ucts cross a na­tion’s bor­ders, the im­port­ing busi­ness pays this tax to its home coun­try’s gov­ern­ment.  

Tar­iffs are typ­i­cal­ly cal­cu­lat­ed as a per­cent­age of the item’s val­ue, known as an ad val­orem tar­iff.

Why Are tar­iffs im­posed:

* Pro­tect do­mes­tic in­dus­tries: By mak­ing im­port­ed goods more ex­pen­sive, tar­iffs en­cour­age con­sumers to buy prod­ucts made lo­cal­ly, shield­ing do­mes­tic busi­ness­es from for­eign com­pe­ti­tion;

* Gen­er­ate gov­ern­ment rev­enue: Tar­iffs pro­vide a source of in­come for gov­ern­ments, es­pe­cial­ly in coun­tries where oth­er forms of tax­a­tion might be lim­it­ed;

* Ad­dress trade im­bal­ances: Tar­iffs can cor­rect trade deficits by dis­cour­ag­ing im­ports and pro­mot­ing ex­ports.