Bharath: US tariffs are a ‘wake up call’

Cranes tower over shipping containers at the Port of Port of Spain. - File photo by Jeff K Mayers

FORMER trade and industry minister Vasant Bharath says the recent decision by the US to impose 15 per cent tariffs on Trinidad and Tobago products entering its market, must serve as a wake up call for this country.

In a statement on August 5, Bharath said, “This latest move by the US reflects a continuing trend of protectionism that is reshaping global trade dynamics,”

He added, "As a small, open economy that relies heavily on international trade, we cannot afford to be passive observers.”

Bharath, who was also a former minister in the ministry of finance, identified several potential areas of concern for TT.

One was export competitiveness.

“If TT’s manufactured or downstream energy products fall within the tariff regime or become less competitive against subsidised US counterparts, we risk losing hard-won market share.”

Bharath cautioned the higher tariff could put pressure on the manufacturing sector.

"Our manufacturing sector, already contending with rising energy and input costs, could face added difficulty accessing or maintaining footing in the U.S. market.”

Investor uncertainty and regional vulnerability are also potential areas of concern.

On the former, Bharath said, "Global investors respond poorly to volatility. Prolonged trade frictions and unpredictability in tariffs and regulations can deter new investment in TT’s industrial and export sectors.”

On the latter, he continued, "We must remember that shocks to the global trading system inevitably affect our supply chains and import prices. This will place additional pressure on consumers and local producers.”

Bharath suggested this is a moment to turn challenge into opportunity.

He said this requires a proactive and strategic response.

“Where there are barriers, there are also opportunities. If global suppliers are displaced due to higher US tariffs, TT may be able to position itself – particularly in niche manufacturing, agro-processing, and value-added exports – to fill emerging gaps.”

Government and private sector, Bharath continued, should use this moment as a catalyst to accelerate diversification and improve competitiveness:

“We need a smarter, more strategic trade agenda – one that strengthens our industrial base, improves logistics, enhances value chains, and ensures our businesses are not left behind in a rapidly evolving global marketplace.”

He said, "This development must reinforce our resolve to expand into new markets beyond North America, deepen trade within Caricom and Latin America, and pursue bilateral agreements that shield our exporters from future shocks.”

The TT Chamber of Industry and Commerce expressed concern about the 15 per cent tariff on August 4.

In a statement, the chamber said government, along with its Caricom counterparts should urgently engage its US counterparts to seek clarity and advocate for a review of the decision.

"This moment highlights the need to revisit and modernise the Caribbean Basin Initiative, ensuring that it remains fit for purpose in a changing geopolitical and trade environment."

On August 4, an Associated Press report said a notice which is to be published in the Federal Register on August 5, indicates the State Department will start a 12-month pilot programme under which people from countries deemed to have to have high overstay rates and deficient internal document security controls could be required to post bonds of US$5,000, US$10,000 or US$15,000 when they apply for a visa.

The report did not identify those countries.

In a statement on the same day, the American Chamber of Commerce (Amcham) said, "We firmly believe that such a policy should not apply to citizens of TT, who have consistently demonstrated compliance with US visa conditions."

Amcham said, "According to the US Department of Homeland Security's FY2023 Entry/Exit Overstay Report (Appendix C), TT’s overstay rate remains one of the lowest in the region, at just 2.43 per cent – a clear indication of our citizens’ respect for immigration rules. This is one of the lowest overstay rates in the world and in the Americas."

Amcham said it was a time when TT and the US were both seeking to deepen commercial ties, encourage legitimate tourism and promote trade and investment.

Amcham suggested any new visa policies being developed with respect to TT and the US should reflect the strong bilateral relationship between both countries and "the track record of compliance shown by our citizens."