Uncertainty, orders to absorb tariffs and possibilities of losing contracts, mainly because of the disadvantage that is now with Mexico, is what exporters are experiencing in the first two days of having charged the new 10% tariffs for imports for imports in the United States to products from Guatemala.
This new rate is part of Donald Trump’s tariff plan, president of the United States, with which they impose global tariff rates, the lowest is 10% and which entered into force this Saturday, April 5.
Guatemala and Central America are included in the first group with 10%, based on the Free Trade Agreement with the United States (DR-CAFTA), except Nicaragua to which 18% was imposed and would charge validity on April 9.
Importers report that 10% should be assumed by Guatemala because otherwise they are seeing suppliers in Mexico, they are the answers that exporters have received in the agricultural sector while manufacturing are in the same situation, explained this Sunday, April 6, Fanny D. Estrada, director of Institutional Relations of the Guatemalan Association of Exporters (AGEXPORT).
In addition, that the brokers (intermediary between exporters and importers) have received instructions from their superiors not Estrada
The AGEXport teams and the sectors worked on Sunday preparing Data that the Government has requested to refine the strategy to face this situation, added the executive.
According to data from the entity in 2024 the country made exports to the United States, for US $ 4,641 million, of which US $ 1,974.13 were from the agricultural sector as a whole, US $ 1 thousand 219.62 were costumes and textiles, and US $ 505.87 of manufactures, among others.
Gravity has not been sized
According to Amador Carballido, general director of AGEXport this week they will have a meeting with authorities of the Ministry of Economy, the Ministry of Foreign Affairs and with the Guatemalan ambassador to Washington.
However, he said that it would be very important that some moment the President of the Republic expressed his concern, which they consider would help a lot.
At present, the concern of the export sector is to try to transmit to the population and the government the impact that means that to the imports of the country to the United States have established 10% of tariff but that Mexico continues with the advantage of zero tariff based on its free trade agreement.
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“There are people who think that with the fact that they put 10% to all Central America, there is no problem, but it is a serious mistake to think so because Mexico has no tariff for their products” and is a very large supplier that can absorb an important portion of what Guatemala currently sends. Although perhaps it cannot be given this year due to the production capacity already planned or installed that Mexico has, but it can be prepared and next year it could cover that market, he added.
To this is added what D. Estrada mentioned respect that exporters must assume the load of 10% of the new tax.
Costumes and textiles
In the case, the costume and textile sector is transferring to the Ministry of Economy information regarding the number of jobs, factories, export and others, said Alejandro Ceballos, vice president of the Association of the Costume Industry and Textiles (Vestex).
Regarding the relationship with buyers, he said that they have no knowledge until Sunday, if customers are asking an exporter to absorb 10% tariff, but believes that they are very likely to ask or propose that they divide it by assuming half each.
“Those are negotiations between factories and more of some client is going to ask for that,” he added. However, he said that it is very difficult for producers in the sector in Guatemala to have the ability to assume 10% of the new United States tax.
“I do not see any factory that I can say: I do under the tariff or absorb 10%”, so it may be that they divide it by 5% between exporter and importer, or that there is a price increase towards the consumer in the United States, Ceballos explained.
It will also depend on what is the true strategy of the president of that country, since if it does to lower the dependency of Asia it could be favored Central America, if it is only a negotiation point, the effect would not be the same.
Regarding the first two days with the new import tariff to the United States, the manager explained that at the moment all buyers continue in the same policy of previous weeks, because there is still uncertainty and have doubts about what will happen, in addition that even with the 10% tariff it is the lowest compared to other countries that compete for Guatemala to supply that market, except Mexico that maintains the advantages of the TLC.
He added that the shipments were made normally, which so far have not received cancellation or suspension of contracts in the sector. But he insists that both buyers and exporters have a lot of uncertainty of how and in what deadlines the 10%rate will be applied, due to the dates mentioned in the new provisions and doubts of what criteria that the customs service of that country will use to apply to apply.
In the midst of these doubts, he says that the sector interprets that what is approved by the United States establishes that the load that has not been in transit before April 5 has already paid 10% tariff in that country; the one that is already in transit before that date and passes customs before May 12 is not charged the new rate; And that if it is in transit before April 5 but fails to enter customs before May 12, it is charged 10%, but they also have uncertainty.
In the case of shipments from Guatemala, ships can arrive in 3 or 4 days, but uploading the load in Guatemala represents another 8 days and lowering it in the United States about 15 days, there are another 15, then the doubts of the criteria that will be used in customs for the collection of the new tariff are remained.
“Customers are known, but they have expressed that they are in great uncertainty about what will charge or what the customs will not collect, and the dates taken into account,” he added.
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At the moment, it indicates that as customers have to sell in the United States they will deal with this situation with what they have because the worst is not selling and losing the sales space, and as some producers have made known customers, customers have told them to continue working quietly because the orders are not canceled. So based on this he believes that this week there will be no changes in the orders we are going forward.
Agricultural: fruits, vegetables and vegetables
Fernando Zuloaga, Manager of the Agrícola de AGEXport sector, indicated that several export markets for agricultural products are at risk.
One of these is that of the mango, which exports 3.5 million boxes and represents an opportunity for many medium and small producers that are part of the export chain.
One of the risks is the loss of competitiveness to Mexico, a country that produces a lot of mango. “That is an example that has worried many exporters,” he said.
For other sectors also, such as vegetables and other fruits, it is a great challenge that can overcome a competitiveness scheme of Mexico. “What I captured is concern, I think agexport that assuming leadership to sensitize the government authorities to negotiate and be able to reach agreements with the United States, he said.
In addition, the Executive Director of Cooperativa Cuatro Pinos, Tulio García, of the production and export sector of vegetables and vegetables mentioned that they still have no changes since the shipments that were dispatched over the weekend will arrive in the United States in the mid -week, at which time they can know exactly how this new tariff measure in practice operates.
Until Sunday they do not have orders or orders cancellations, since it considers that very early, due to the recent validity of the tax.
“We are in permanent communication with customers looking for options to reduce the negative impact and maintain the competitiveness of our exports,” he added.
Hilature, textile and preparation face other uncertainty factors
Another uncertainty that the costume and textile sector has is whether Vietnam, and other Asian countries, are going to keep the rates that announced that they are much higher than those of Guatemala.
“If these tariffs enter the Asian countries, they will be many more expensive to produce, and Guatemala would continue to be the cheapest option with 10%,” Ceballos explained.
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The other aspect that must be taken into account is the origin of the raw material, since if Guatemala sends a garment or component that has fiber and thread of the United States and this exceeds 20% of the value of the garment, it could enter with zero tariff value, but if it does not reach that percentage of the garment value then they must pay 10% tariff.
“The costume and textile sector has a lot of rules with which you have to be careful and I think that US customs is not ready, so it continues to cause uncertainty how it will apply,” said Ceballos.
The 18% tariff to Nicaragua could relocate factories
Ceballos explains that the fact that Nicaragua is going to set 18% of tariff could also affect Guatemala in several ways. One of these is that the advantage of going to sew Nicaragua is lost, and with that additional 8% compared to the 10% that our country will have better sew it in Guatemala. Therefore, several factories, mainly the Koreans, are revaluing the situation to define whether they leave the clothing part in the country. Since the fabrics are currently sent to make them there.