Was China the reason this Caribbean nation faced higher Trump tariff?

The Caribbean nation of Guyana is breathing a sigh of relief after US President Donald Trump announced a 90-day pause on the introduction of higher tariffs on a number of countries.

Guyana, which is nestled between Venezuela and Suriname on the South American mainland, had been singled out for rates of 38% on many of its exports.

Following Trump’s change in policy, it now faces tariffs of only 10% – the same as all countries apart from Canada, China and Mexico.

But why had Guyana been facing a higher levy in the first place?

Guyanese political commentator Francis Bailey says the country is caught in a geopolitical battle between the US and China. Or more specifically – Washington objects to Beijing’s “very strong foothold” in Guyana.

Recent years have seen billions of dollars of investment in Guyana by Chinese entities, in everything from roads and hospitals, to hotels and shopping centres. And a crucial new bridge linking the capital Georgetown to the western region of Demerara-Mahaica is currently under construction by a Beijing-based company.

For its part, the US continues to be happy to buy Guyana’s key exports of crude oil, gold and bauxite, which is the ore from which aluminium is extracted. These were all to be exempt from the planned 38% tariff, which instead would have hit Guyana’s fishing and sugar industries.

The US also backs Guyana in its territorial dispute with Venezuela over the vast Essequibo region that forms the western two thirds of Guyana. During a visit to Georgetown in March, Secretary of State Marco Rubio warned Venezuela of “consequences” if it were to use force against Guyana.

But the planned high tariff showed Washington’s ire, says Mr Bailey. “I think the reason we had been given such high tariffs is to apply pressure on Guyana.

“The US is saying, ‘if you want our protection you need to chase the Chinese out of your country’. Trump is a very transactional president – and Guyana is in a very precarious position against its sabre-rattling adversary Venezuela which has been ramping up acts of aggression.”

The Guyanese government did not respond to requests for comments. The country, once one of the poorest nations in the western hemisphere, and a former British colony, has been enjoying a surge in wealth since it first discovered oil in its territorial waters in 2015.

Last year it exported $3.13bn (£2.4bn) of crude oil to the US, according to United Nations figures.

Across the Caribbean all countries now face a 10% tariff on their exports to the US. However, it is the price impact of Trump’s global tariffs on what they import from the US that is of most concern.

This is because the Caribbean’s love for, and reliance on, US products is immediately apparent when you glance at a High Street or supermarket shelf across the region. In fact, some islands are said to import as much as 70% of their consumer goods from their North American neighbour.

And with American goods that rely on overseas raw materials or components set to go up in price, this will inevitably be passed on to consumers in the Caribbean.

Also, much of what Caribbean nations buy from other countries around the world comes to them via the US.

So with the White House now hitting Chinese goods coming into the US with tariffs of 125%, Chinese items that are then reexported to the Caribbean should see price hikes of a similar amount. And by around 10% for goods from other countries that arrive via the US.

With already ever-increasing shipping costs in the Caribbean, and high local import duties causing exorbitant prices in a region beset by low wages, the impact of Trump’s tariffs could be profound and keenly felt.

In Antigua and Barbuda, interior designer Carissa Warner tells the BBC that 70% of her materials are imported from the US, and 20% from China.

“Some of my projects are on hold while we wait to see what happens,” she explains. “I am extremely worried from a business aspect but also just as a local consumer.

“I’m so worried about the cost of food I have been looking online for pots to start growing fresh produce. I don’t think people realise the impact it will have on us.”

Ms Warner believes one way Caribbean governments could ease the squeeze on their people is by lowering their own import duties, which are partially calculated using a percentage of an item’s cost.

Antigua and Barbuda’s Prime Minister Gaston Browne has dubbed global tariffs “extremely worrisome” and is urging citizens to “buy smarter and buy local”.