Ana Lucia Santacruz, Tax Partner, BPS and International Trade and Ludy Lima, International Trade Manager of the Deloitte, explained to Free press That the implementation of these tariffs will negatively affect Guatemalan exports to the United States.
In addition, they consider that it will probably result in a lower demand for exported products from Guatemala.
The measure, according to the specialists, seeks to correct the commercial practices that contribute to the large commercial deficits of assets of that country.
Most affected sectors
The export sector in general will be the most affected, especially those products that currently enjoy preferential tariff treatment under the Free Trade Agreement between the Dominican Republic-CentroMérica and the United States of America (DR-CAFTA).
These products will have a 0% tariff rate to face an additional 10% tariff, increasing their prices and reducing their competitiveness in the US market, professionals indicated.
Expectations and prices
Although the exact legal basis is expected to be known once the executive order is issued, the measure can already be considered as a fact, since the announcement was officially made by the president of the United States.
The reciprocal tariff policy will begin to be applied on April 5, 2025 at midnight and the prices of Guatemalan merchandise in the US market will rise due to the additional 10%tariff, which will probably reduce the demand for these products, the Deloitte executives affirm.
Impact on the Guatemalan economy
Santacruz and Lima agree that the Guatemalan economy could face several challenges if these tariffs are implemented. The potential impacts include a greater deficit in the commercial balance, decrease in the income of currencies, loss of jobs in the export sector and a reduction of the gross domestic product (GDP). In addition, the measure could generate uncertainty in the market and affect the country’s economic stability.
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Next, two examples of how this measure will affect what is sent to the United States:
Merchandise A:
- Origin: Considered originally under dr-Cafta.
- Current tariff: 0%.
- New tariff (as of April 5): 10%.
- Impact: Increase in the cost of merchandise for the US consumer.
Merchandise B:
- Origin: Considered non -native.
- Current tariff: 5%.
- New tariff (as of April 5): 15% (current 5% + 10% additional).
- Impact: Increase in the cost of merchandise for the US consumer.
IMPORTANT KEYS:
- The examples are based on the executive order.
- It is necessary to know the instrument of the executive order issued by the Office of the Commerce Representative (USTR).
- Results of the commercial negotiations between Guatemala and the US. UU. Still pending.
- Guatemala considers that the application of this tariff is violation of the provisions of DR-CAFTA.
The Guatemala government informs about the new tariffs imposed by the United States.#Release 🔗 https://t.co/cuv0ojtxpn pic.twitter.com/jftfalbfcf
– Minex Guatemala 🇬🇹 (@minexgt) April 3, 2025
Open other possibilities
Deloitte’s specialists, refer that the measure imposed by the Trump administration presents both challenges and opportunities for Guatemala.
While the competitiveness of Guatemalan products could be affected, possibilities are also opened to promote exports and attract investments.
Both professionals conclude that the situation must be analyzed in depth, and the Guatemalan authorities must use diplomatic and commercial channels to ensure that the commitments assumed within the framework of the DR-CAFTA are respected.