Waiting game
Government awaiting more details on US levy, sees opportunity for new trade allies
With just days to go before a new 10 per cent blanket tariff from the United States takes effect, Government officials are working to assess the fallout, engage with counterparts, and chart a path forward in what could be one of the most consequential trade disruptions in years.
The ministries of foreign affairs and industry, investment, and commerce have already begun internal reviews of the tariff order issued by US President Donald Trump on April 2, which declares a national emergency tied to America’s large and persistent trade deficits, the Jamaica Observer has learnt.
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A reciprocal tariff regime — set to take effect on April 5 — is now being framed as a national security imperative by the United States, and will impact almost all trading partners, regardless of existing trade arrangements.
Jamaica, Trinidad and Tobago, Grenada, and St Kitts-Nevis among other Caribbean neighbours have been slapped with the 10 per cent tariff.
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“Clearly, we’re waiting on more details. When something like this happens you usually have to wait until you see the exact document so you know what it means,” Industry, Investment and Commerce Minister Senator Aubyn Hill told BusinessWeek while confirming that both ministries are working in tandem, supported by Jamaica’s diplomatic channels in Washington, DC.
“Our foreign minister, Kamina Johnson Smith, and her team are working with us to take a detailed look, even while we await the exact wording of what the tariff means,” he said, adding that the Government expects to receive clearer details “soon”, following ongoing discussions with US counterparts, including Secretary of State Marco Rubio.
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“Whatever it is, we’re going to be ready to move forward, even if we have to face challenges,” Minister Hill said.
That formal review is expected to shape Jamaica’s next move — whether through direct lobbying, diplomatic appeals for exemptions, or rapid response mechanisms to support affected exporters. Jamaica’s case for carve-outs may hinge on its long-standing participation in the Caribbean Basin Initiative (CBI), a US programme launched in 1983 that allows more than 5,800 goods from Caribbean nations to enter the US duty-free. But under the emergency powers now being used by President Trump, those preferences can be set aside.
Still, Minister Hill is urging calm.
“Ten per cent is the lowest tariff that’s described. It could have been worse,” he said. But he also acknowledged the wider implications. “This is now an incentive to trade closer with our Caribbean and Latin American partners… traditional markets alone didn’t make us rich.”
Over the past two years, the Government has stepped up trade missions to non-traditional partners like Colombia, El Salvador, Mexico, and Chile, a move now taking on added urgency. “If we’re going to become a rich country, we have to go elsewhere,” said Minister Hill.
“Chile is a rich country and there are lots of other countries in the Latin American region. Of course, we also want to develop a stronger relationship with countries like Guyana, who are traditional trading partners. In everything, there are opportunities,” he said.
While the Government analyses the fine print, business leaders are already gaming out the scenarios. Richard Pandohie, CEO of Seprod Group and chair of Caribbean Producers Jamaica, warned that the new US tariffs could increase the cost of Jamaican goods and jeopardise market share.
“If everything remains as is, then the 10 per cent tariff is expected to increase the cost of our exported goods in the US market,” he told BusinessWeek. “We could potentially face reduced export volumes in the manufacturing and agricultural pillars if we do nothing.”
Nevertheless, he reasoned that manufacturers must remain “calm before jumping to conclusions” as it is still early days.
William Mahfood, chairman of Wisynco Group, also urged caution. “It’s a little premature [to comment] until we know exactly what is impacted,” he said. “If it’s on all products coming out of Jamaica, it will definitely affect us because Jamaica has preferential treatment under the CBI. But if all the other countries have tariffs, then another way to look at it is the rate that’s being applied country by country.”
Private Sector Organisation of Jamaica (PSOJ) President Metry Seaga is also in wait-and-see mode. “It’s too early to comment,” he said. “We need to hear details. We are awaiting those details and will comment thereafter.”
The United States remains Jamaica’s largest trading partner. Between January and November 2024, Jamaica exported US$674 million worth of goods to the US, accounting for nearly 40 per cent of total exports. Imports from the US over the same period totalled US$2.6 billion, reinforcing the scale of the trading relationship — and the trade imbalance.
Goods most at risk include processed food, sauces, rum, chemicals, and certain manufactured articles, many of which currently enter the US market under CBI preferences. But under Trump’s International Emergency Economic Powers Act (IEEPA) order, exemptions are narrow, covering items like pharmaceuticals, copper, semiconductors, and energy products — categories where Jamaica has limited or no export activity.
Minister Hill noted that Jamaica’s resilience during the pandemic and more recently after Hurricane Beryl that hit sections of the island last July, is evidence that the country can adjust swiftly to economic shocks. But he also acknowledged that, even in strong fiscal shape, Jamaica needs new partners and fresh strategies.
The shift may already be underway. Exports to Latin America and non-traditional partners grew in 2024, while exports to the US declined by 11.4 per cent. Meanwhile, domestic exports overall rose 9.2 per cent, led by a 30.5 per cent increase in mining and quarrying, including alumina — though this sector’s exposure to the US market remains significant.
Pandohie said local companies will need to redouble efforts to improve productivity and absorb price shocks.
“The pressure is on us big time to move from talk to execution if our products are to remain affordable to American consumers,” he said, adding that collaboration between the private sector and Government is now critical.
SEAGA… we need to hear details
PANDOHIE… we could potentially face reduced export volumes in the manufacturing and agricultural pillars if we do nothing
WASHINGTON, DC, United States — US President Donald Trump holds a chart as he delivers remarks on reciprocal tariffs during an event in the Rose Garden entitled “Make America Wealthy Again” at the White House in Washington, DC, on April 2, 2025. (Photo: AFP)
MAHFOOD… if it’s on all products coming out of Jamaica, it will definitely affect us because Jamaica has preferential treatment under the CBI
