With the United States set to implement reciprocal tariffs by August 1, 2025, Caricom Chair Andrew Holness says while talks with the Donald Trump administration continue, the time has come for the region to take trade diversification, especially within the Caribbean, more seriously.
“And now, it’s not just a matter of talk, it is an urgent matter,” Holness said at the closing media conference for the 49th Regular Meeting of the Conference of Heads of Government at Caricom here in Montego Bay, Jamaica.
On April 2, 2025, the US announced a sweeping new slate of “reciprocal tariffs” on about 60 countries or trading blocs that had a high trade deficit with the United States. This included a ten per cent baseline tariff on most imported goods from April 5, 2025.
The Trump administration’s tariffs have significant implications for other countries. Goods exported to the US become more expensive due to the tariffs. This reduces their price competitiveness in the American market, potentially leading to lower sales and revenue for businesses in affected countries.
Trinidad and Tobago’s top export to the US is crude petroleum.
However, after market panic, the Trump administration initially paused its implementation for 90 days to allow for negotiations. That period is set to expire today but a further extension has been given until August 1 to give countries more times to strike deals.
Most Caricom nations are being threatened with a 10 per cent baseline tariff.
Asked if the matter came before Caricom during the meeting, Holness replied, “As you would know, Caricom has an external trade negotiation committee. We have engaged with the US trade representative on this matter, and they have essentially said that after the 9th (July), then they will reengage with us for further negotiations. So, we are preparing for very strong negotiations for our position.”
However, if the tariff is to be implemented, Holness said Caricom must adapt. He said for a long time the region has been talking about strengthening trade cooperation with Africa, Central and South America and even within Caricom.
“Because even within Caricom, the trade is probably less than 15 per cent internal relative to total trade. So, the question is, what are you going to do with this new base tariff that’s implemented? But one of the things we have to do is to diversify our trade.”
However, Holness acknowledged there are still challenges to strengthening trade within Caricom.
“There are still some non-tariff barriers and other measures that form an obstacle to trade. And we have put together a committee headed by the foreign ministers and ministers of trade of Jamaica and Barbados to seriously examine how we can reduce, if not totally remove, these non-tariff barriers and to standardise procedures across the board to facilitate greater trade intra-regionally. The region has incredible resources, but there needs to be greater economic coordination through the CSME (Caribbean Single Market and Economy), but directly through our private sector,” Holness explained.
The Caricom Chair, who is also Jamaica’s Prime Minister, said there are incredible resources within the region.
“For example, Guyana, Trinidad, and Suriname have incredible resources in energy. They have discovered oil. Jamaica has a very strong financial architecture, strong financial markets. Other areas are strong in agriculture and services. So there is a strong intra-regional basis for trade.”
But Holness admitted that public infrastructure to support this initiative is lacking. A critical one he pointed to is transportation.
“We have made some progress in air transportation. And from my remarks earlier, I mentioned that we are well down the road in developing a plan for a ferry service regionally, which is likely to start in the Eastern Caribbean, but that would also have some cargo capabilities.”
He declared that for the first time, the region is taking very seriously the diversification of the Caribbean Single Market and Economy and the common economy.
With respect to the CSME, Holness said it was critical to this thrust, particularly free movement within the region.
“There needs to be a freer and more integrated capital market and a freer labour market, and therefore the free movement of labour in the region is something that is critical, and as I had announced earlier, we now have four countries that have indicated that they are at the stage where they are prepared to start as of October 1. And Jamaica is making the commitment that we will do it, but we still have to work out our internal legal and procedural issues.”
The four countries that intend to allow free movement from October 1 are Barbados, Belize, St Vincent and the Grenadines, and Dominica.
