In a state­ment post­ed on the web­site of the Min­istry of Trade and In­dus­try three days af­ter a March 24, 2023 cour­tesy call from for­mer US Am­bas­sador to T&T, Can­dace Bond, the min­istry said: “Min­is­ter Gopee-Scoon ac­knowl­edged that T&T and the US con­tin­ue to main­tain good re­la­tions in trade with the US be­ing this coun­try’s largest trad­ing part­ner.

“For the past three years, T&T’s av­er­age an­nu­al ex­ports to the US were val­ued at TT$22.3 bil­lion while im­ports av­er­aged TT$14 bil­lion. Among the top ex­ports to the US in­clude an­hy­drous am­mo­nia, fer­rous prod­ucts from iron ore, liq­ue­fied nat­ur­al gas, methanol, crude pe­tro­le­um and urea.

“T&T’s prod­ucts cur­rent­ly ben­e­fit from pref­er­en­tial ac­cess to the US mar­ket un­der the Caribbean Basin Ini­tia­tive (CBI) and it is to be not­ed that T&T has been the lead­ing ex­porter un­der this arrange­ment since 2005.”

In an Au­gust 18, 2023 bi­lat­er­al re­la­tions fact sheet, the US State De­part­ment said, “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...

“Trinidad’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.”

In a post on its web­site, the Ob­ser­va­to­ry of Eco­nom­ic Com­plex­i­ty (OEC) in­di­cat­ed, “In 2022, T&T ex­port­ed US$4.91 bil­lion to the Unit­ed States. The main prod­ucts that T&T ex­port­ed to the Unit­ed States were crude pe­tro­le­um (US$1.32 bil­lion), am­mo­nia (US$1.17 bil­lion), and pe­tro­le­um gas ($904 mil­lion).

“Over the past five years, the ex­ports of T&T to the Unit­ed States have in­creased at an an­nu­alised rate of 7.13 per cent, from US$3.48 bil­lion in 2017 to US$4.91 bil­lion in 2022.

“In 2022, the Unit­ed States ex­port­ed $3.03 bil­lion to T&T. The main prod­ucts that the Unit­ed States ex­port­ed to T&T were re­fined pe­tro­le­um (US$969 mil­lion), planes, he­li­copters, and/or space­craft (US$136 mil­lion), and iron ore (US$120 mil­lion). Over the past five years, the ex­ports of Unit­ed States to T&T in­creased at an an­nu­alised rate of 11.3 per­cent from US$1.78 bil­lion in 2017 to US$3.03 bil­lion in 2022.”

It is im­por­tant to un­der­line sev­er­al points made above:

* The US is T&T’s largest trad­ing part­ner;

* De­spite the dis­par­i­ty in the num­bers be­tween the US State De­part­ment and the Ob­ser­va­to­ry of Eco­nom­ic Com­plex­i­ty, it is clear that T&T en­joyed a trade sur­plus with the US in 2022, and prob­a­bly still en­joys a trade sur­plus with that coun­try;

* Most of T&T’s ex­ports to the US come from the en­er­gy sec­tor, oil and nat­ur­al gas, or from petro­chem­i­cal man­u­fac­tures;

* T&T’s largest im­port from the US is re­fined pe­tro­le­um (gaso­line, diesel, kerosene and jet fu­el);

* T&T’s ex­ports to the US ben­e­fit from pref­er­en­tial ac­cess to the US mar­ket un­der the Caribbean Basin Eco­nom­ic Re­cov­ery Act (CBERA) of 1983, which au­tho­rised uni­lat­er­al pref­er­en­tial trade and tax ben­e­fits for el­i­gi­ble Caribbean coun­tries, in­clud­ing du­ty-free treat­ment of el­i­gi­ble prod­ucts.

Ac­cord­ing to the Wikipedia en­try on CBERA, the leg­is­la­tion is of­ten re­ferred to as the Caribbean Basin Ini­tia­tive (CBI) and has been amend­ed sev­er­al times, with the last sub­stan­tive re­vi­sions be­ing made in the Caribbean Basin Eco­nom­ic Re­cov­ery Ex­pan­sion Act of 1990.

“This made trade ben­e­fits per­ma­nent (re­peal­ing the Sep­tem­ber 30, 1995 ter­mi­na­tion date). The law gives pref­er­en­tial trade and tax ben­e­fits for el­i­gi­ble Caribbean coun­tries, in­clud­ing du­ty-free en­try of el­i­gi­ble prod­ucts. To be el­i­gi­ble, an ar­ti­cle must be a prod­uct of a ben­e­fi­cia­ry coun­try and im­port­ed di­rect­ly from it, and at least 35 per cent of its im­port val­ue must have orig­i­nat­ed in one or more CBERA ben­e­fi­cia­ries.”

Any chance of harm to T&T?

The premise of this ar­ti­cle—and in par­tic­u­lar the head­line—is that pol­i­cy­mak­ers in the Caribbean Com­mu­ni­ty (Cari­com) need to start con­sid­er­ing the pos­si­bil­i­ty that Amer­i­can Pres­i­dent, Don­ald John Trump, may de­cide in the fu­ture that the US would scrap CBERA, which al­lows el­i­gi­ble prod­ucts from coun­tries in the Caribbean Basin du­ty-free ac­cess to the US mar­ket.

It seems to me that if Mr Trump was pre­pared to rip up the Unit­ed States-Mex­i­co-Cana­da Agree­ment (USM­CA), which is a free trade agree­ment be­tween the three coun­tries, and threat­en 25 per cent tar­iffs, he would be pre­pared to throw CBERA in the dust­bin with very lit­tle thought and im­pose 25 per cent tar­iffs on re­gion­al ex­ports. That is, of course, if he thought there was some po­lit­i­cal ad­van­tage he could gain from do­ing so.

It goes with­out say­ing that as T&T is one of the largest Cari­com ex­porters to the US—it may have been eclipsed by Guyana in 2024—the econ­o­my would be dev­as­tat­ed if the US gov­ern­ment im­ple­ments 25 per cent tar­iffs on the coun­try’s ex­ports of oil, LNG, methanol, am­mo­nia, urea and oth­er petro­chem­i­cals.

In 2022, the to­tal trade be­tween the Unit­ed States, Mex­i­co, and Cana­da (USM­CA) was US$1.8 tril­lion. This in­clud­ed US$789.7 bil­lion in ex­ports and US$974.3 bil­lion in im­ports. In trade terms, Cana­da and Mex­i­co are in­fi­nite­ly more con­se­quen­tial to the US than Cari­com.

Mr Trump an­nounced on Feb­ru­ary 1, 2025, that the US would im­ple­ment a 25 per cent ad­di­tion­al tar­iff on im­ports from Cana­da and Mex­i­co, with oil and gas im­ports to re­ceive a low­er tar­iff of 10 per cent. His ra­tio­nale for threat­en­ing to im­pose these tar­iffs on Cana­da and Mex­i­co is “the ex­tra­or­di­nary threat posed by il­le­gal aliens and drugs, in­clud­ing dead­ly fen­tanyl,” which he said con­sti­tut­ed a na­tion­al emer­gency un­der the In­ter­na­tion­al Emer­gency Eco­nom­ic Pow­ers Act.

The lan­guage used by Mr Trump in ra­tio­nal­is­ing the im­po­si­tion of tar­iffs on Cana­da is in­struc­tive:

“On Feb­ru­ary 1, 2025, I de­ter­mined that the fail­ure of Cana­da to ar­rest, seize, de­tain, or oth­er­wise in­ter­cept drug traf­fick­ing or­gan­i­sa­tions, oth­er drug and hu­man traf­fick­ers, crim­i­nals at large, and il­lic­it drugs con­sti­tutes an un­usu­al and ex­tra­or­di­nary threat, which has its source in sub­stan­tial part out­side the Unit­ed States, to the na­tion­al se­cu­ri­ty, for­eign pol­i­cy, and econ­o­my of the Unit­ed States.”

This sug­gests to me “the fail­ure of Cana­da to ar­rest, seize, de­tain, or oth­er­wise in­ter­cept drug traf­fick­ing or­gan­i­sa­tions,” would have been a ma­jor fac­tor in the threat to im­pose the 25 per cent tar­iff on non-en­er­gy ex­ports by Cana­da to the US and the 10 per cent tar­iff on en­er­gy tar­iff.

Can coun­tries in Cari­com al­so be ac­cused of fail­ing “to ar­rest, seize, de­tain, or oth­er­wise in­ter­cept drug traf­fick­ing or­gan­i­sa­tions”?

If, for ex­am­ple, the T&T Gov­ern­ment were ac­cused by the Trump ad­min­is­tra­tion of fail­ing “to ar­rest, seize, de­tain, or oth­er­wise in­ter­cept drug traf­fick­ing or­gan­i­sa­tions,” what would it say in re­sponse? That T&T’s deputy Com­mis­sion­er of Po­lice, In­tel­li­gence and In­ves­ti­ga­tions, Suzette Mar­tin, was too busy seek­ing to re­move her boss, Er­la Hare­wood-Christo­pher, to pay at­ten­tion to in­ter­cept­ing drug traf­fick­ing or­gan­i­sa­tions?

On Mon­day, Mr Trump paused the im­ple­men­ta­tion of the 25 per cent tar­iff on Cana­da and Mex­i­co un­til March 4. The ex­ec­u­tive or­der he is­sued said those coun­tries “have tak­en im­me­di­ate steps to al­le­vi­ate the il­le­gal mi­gra­tion and il­lic­it drug cri­sis through co­op­er­a­tive ac­tions,” and that more time was need­ed “to as­sess whether these steps con­sti­tute suf­fi­cient ac­tion to al­le­vi­ate the cri­sis and re­solve the un­usu­al and ex­tra­or­di­nary threat” as a re­sult.

Cana­da won the re­prieve from the im­me­di­ate im­ple­men­ta­tion of the tar­iffs on Feb­ru­ary 3 by agree­ing to name a fen­tanyl czar, list­ing Mex­i­can drug car­tels as ter­ror­ist groups and launch­ing a Cana­da/US joint strike force to com­bat or­gan­ised crime, fen­tanyl and mon­ey laun­der­ing.

If the US were to threat­en to im­pose tar­iffs on the re­gion, what col­lec­tive ac­tions would Cari­com lead­ers pro­pose to mit­i­gate or elim­i­nate the tar­iffs?

One ex­pects that this will be at the top of the agen­da of Cari­com heads of gov­ern­ment when they meet in Bridgetown, Bar­ba­dos, be­tween Feb­ru­ary 19 and 21, un­der the theme – Strength in Uni­ty: Forg­ing Caribbean Re­silience, In­clu­sive Growth, and Sus­tain­able De­vel­op­ment.