The United States’ proposal to increase the overall tariff on imports from Guyana to 12.5 percent on grounds that this South American nation imports products made by forced labour could adversely affect new Guyanese products aimed at the US market, former head of the US Foreign Commercial Service Arun Venkataraman said on Wednesday.
Delivering a presentation at a World Trade Centre Georgetown-organised luncheon on the topic “Growing business with the United States – strategies for navigating business with the United States given the current global geopolitical landscape”, he said the US’ current 10 percent tariff could increase by two percent. The actual proposed tariff, according to the US Trade Representative (USTR), is 12.5 percent.
“If anything, the most significant harm, unfortunately, is likely to be in suppressing new categories of exports to the United States from other developing industries in Guyana, in particular such as agricultural production,” he said.
The American trade expert said the aggregate effect of the tariff on Guyana’s exports was likely to continue to be limited given the current exemptions for petroleum products and bauxite.
Mr Venkataraman says the new country-specific rate being proposed by the US administration followed a forced labour investigation.
This rate will also be applied to other Caribbean countries including The Bahamas, Dominican Republic, and Trinidad and Tobago.
According to the report, the investigation found that Guyana has failed to impose and effectively enforce a forced labor import prohibition, something that is unreasonable and burdens or restricts US commerce.
The USTR on June 6 listed Guyana as one of 60 countries that were importing products that were produced by forced labour.
As a result, the US government said its companies were being put at a disadvantage.
“The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field,” said Ambassador Jamieson Greer.
“We will no longer tolerate this disparity. Some trading partners have taken initial steps to prevent the importation of forced labor goods, including through USMCA and commitments in Agreements on Reciprocal Trade. However, each of our trading partners must do more to ensure that trade does not perversely encourage and entrench forced labor globally.”
The USTR says it will hold hearings about the proposed actions in these investigations on July 7.
The USTR determined under Section 301 of the Trade Act of 1974 that the acts, policies, and practices of 60 economies related to the failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor is unreasonable and burdens or restricts U.S. commerce, and are thus actionable under Section 301(b) of the Trade Act.
The Office of the United States Trade Representative has prepared a comprehensive report, Acts, Policies, and Practices of Various Economies Related to the Failure to Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced with Forced Labor, that supports the findings in each investigation.
Specifically, the USTR proposes additional duties on all products of the investigated economies, except as provided in Annex A to the Federal Register notice.
For economies that impose a forced labor import prohibition, that have committed to impose and enforce such a prohibition through an agreement on reciprocal trade, or economies that have imposed a partial regime with the effect of preventing the importation of certain forced labor goods, the USTR proposes 10% as the rate of additional duties.
For all other economies, the USTR proposes 12.5% as the rate of additional duty.
The USTR also proposes a textile mechanism that would allow for a certain volume of apparel and textile imports from certain economies to enter the United States at a reduced Section 301 tariff rate.
Mr Venkataraman noted that US imports to Guyana dropped from 28 percent in 2024, making the United States the largest importer in the country, but that figure slumped to 17.9 percent in 2025, possibly due to the US’ new tariff regimes.
He said Guyana’s highest value imports from the US in both 2024 and 2025 were machinery and articles of iron or steel and mineral fuels, many of which are subject to sector-specific metal tariffs.
With the Donald Trump-led administration’s resort to several categories of tariffs on foreign goods as part of a transactional foreign policy expected to continue even if the Democrats return to power at elections in November 2028, the former Head of the US Foreign Commercial Service advised Guyanese businesses to leverage a number of opportunities within and outside Guyana.
Further, he said within technical rules, there are some tools that can be used to facilitate exports even in this challenging environment.
He said under the US tariff code, US importers could deduct the value of US inputs from the import value declared to customs at the border.
He said at a time when tariffs were imposed on products and components, to be able to use US inputs and then send that finished product back to the US and then have that product not be tariffed on the US part of the value of that good was a great example of how trade rules have changed under this administration.
Mr Venkataraman also advised Guyanese businesses to leverage the Guyanese diaspora by forging relationships that can form the core of business partnerships. He said Guyanese companies should consider pathways and opportunities that Guyanese and US governments can prioritise.
He said Guyanese businesses could help encourage and shape bilateral agreement priorities by engaging with trade associations, American counterparts, and government officials, emphasising areas and opportunities where there is alignment on strategic priorities, such as critical minerals.
Looking ahead, he said a large segment of Americans have grown tired with the estimated 30-year predictable and stable multilateral trading environment of rules and tariffs that “is no longer fit for purpose” and were prepared to see the US continue reasserting itself.
“This is not a blip. This is not a hiccup. The change that has happened is fundamental, and it is enduring. Some of the tactics might be different. Some of the ways and the approaches taken might be different with the next president, the next administration, but at the core, the fundamental changes that are happening, not just in the United States, not just because of the United States, but across the world, including in this region, those changes are here to stay,” he said.
He conceded that a new administration – Republican or Democrats – might reverse several actions by the Trump-led administration, take a different approach to fix it or impose tariffs on rich nations instead of emerging markets and developing nations.
Looking to the future of the World Trade Organisation (WTO), Mr Venkataraman said that global rules-based trade watchdog could still survive.
He referred to “good faith efforts on all sides” to improve that organisation but achieving consensus is a key ingredient in its decision-making.
He said recent developments might create the impetus to revive the WTO.
“In a way, perhaps the experience of these few years might incentivize members to reach consensus and maybe to change the system in ways that they might not have accepted five years ago. So I don’t want to rule out the WTO suggests that it’s dead or it’s gone,” he said.
He encouraged “all our friends” to continue working with the WTO to make it the right institution that balances the need for discipline and rules with the need for flexibilities for all countries to be able to take certain actions for their economic security purposes.
“Figuring out how and where to draw that line is perhaps the challenge,” he said.
Discover more from Demerara Waves Online News- Guyana
Subscribe to get the latest posts sent to your email.
