THE announcement of a 38 per cent reciprocal tariff on Guyanese exports to the United States has sparked concerns among local businesses and policymakers.

However, as Vice President Dr. Bharrat Jagdeo rightly pointed out, there is no need for panic, rather, this moment calls for strategic engagement, diplomacy, and a well-reasoned economic response.

The tariffs, introduced by US President Donald Trump as part of his broader trade strategy, aim to address America’s trade imbalances by targeting countries with trade surpluses.

The logic is clear: nations exporting more to the US than they import will face increased duties. While this may seem like a fair policy on the surface, the discrepancies in trade data between Guyana and the US raise important questions about the accuracy of these calculations.

The United Nations (UN) global trade platform, Comtrade data, as cited by Jagdeo, indicated that, for 2024, Guyana exported US$3.3 billion to the US and imported US$2.56 billion, so there was a trade surplus.

However, the US reported that the exports from Guyana into that country totalled US$5.5 billion while the imports amounted to US$1.3 billion. According to their figures, there was a trade surplus of $4.1 billion.

These conflicting figures suggest that the formula used to determine Guyana’s tariff rate may be based on flawed or outdated data. This is precisely where diplomatic dialogue must come into play.

Dr. Jagdeo has made it clear that the government will engage with US authorities to clarify trade figures and advocate for a reduction in the tariff percentage. This approach is not only pragmatic but necessary. If the US acknowledges that Guyana’s trade surplus is significantly lower than reported, it could lead to a substantial reduction in the tariff burden.

Additionally, Guyana must highlight the unique nature of its trade relationship with the US, particularly in the petroleum sector.

A significant portion of Guyana’s exports to the US are driven by oil sales, with American companies such as ExxonMobil and Hess Corporation being the primary beneficiaries.

The irony here is that while Guyana’s trade surplus appears large, much of the revenue from these exports flows back to American businesses. This factor should be central to Guyana’s negotiations.

Beyond trade statistics, there is also the question of economic impact. Local businesses that depend on the US market—particularly in agriculture, mining, and manufacturing—could face challenges if these tariffs remain in place. The government’s pledge to work closely with exporters and safeguard their access to key markets is a necessary step in ensuring economic stability.

At the same time, this situation should serve as a wake-up call for Guyana to continue diversifying its trade partners and reduce its reliance on the US market.

While the US remains a key economic ally, strengthening ties with other global markets could provide alternative avenues for export growth and reduce exposure to external trade policies that may not always be favourable.

As Dr. Jagdeo pointed out, these tariffs are part of a global policy shift by the US and are not unique to Guyana. The focus should be on finding solutions rather than exploiting the situation for political gain, as seen in the opposition camp.

Ultimately, Guyana must take a firm yet diplomatic stance in its negotiations with the US. A fair reassessment of trade figures, recognition of American corporate interests in Guyana, and a commitment to supporting local exporters should form the pillars of the government’s strategy. With careful diplomacy and strong economic advocacy, there is a real opportunity to lessen the impact of these tariffs and ensure that Guyana’s trade relationships remain both balanced and beneficial.