The reciprocal tariffs

Apr 04, 2025 Features / Columnists, Peeping Tom

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Peeping Tom…

Kaieteur News- Vice President Bharrat Jagdeo has once again proven his talent for making the indefensible appear to be routine. This time he downplayed the impact of the 38% tariffs imposed by the Trump administration on Guyanese exports—excepting, of course, the strategic exemptions of oil, gold, and aluminum ore.

Reciprocation, Jagdeo suggests, is the logic behind this move, though one wonders how a one-sided punitive measure qualifies as anything other than a unilateral broadside against a small, open economy.

Before Guyana struck black gold, its trade balance with the United States was comfortably tilted in favor of American exporters. In 2018, America enjoyed a huge trade surplus with Guyana.

But oil, that eternal disruptor of the balance of things, has transformed Guyana’s position from that of a perpetual debtor to that of a net exporter, at least in ledger entries. And therein lies the rub. The scale of this shift must be enormous for the United States to impose such punitive tariffs. In normal economic statecraft, an administration does not impose a 38% tax on imports from a country whose trade surplus is trivial.

Jagdeo, in his usual fashion, quoted figures at his press conference. One might have expected a properly documented analysis, perhaps a reference to data from the Bureau of Statistics or the Bank of Guyana. But no, Jagdeo, ever the magician, offered numbers shrouded in mystery—year unstated and sources unclear.

The Bureau of Statistics’ website provides no published disaggregated data for Guyanese exports to the U.S. for 2024. This should be concerning, even to Jagdeo. After all, how does one engage in trade negotiations with a global superpower when one does not have, at one’s fingertips, the most timely and basic data on trade volumes and values?

The IMF’s Article IV consultation already excoriated the PPP government for its lamentable data gaps and systemic statistical deficiencies. That such an elementary issue persists despite repeated censure from international financial institutions is a damning indictment of governance.

Even if we take Jagdeo’s statements at face value, his insistence on downplaying the economic impact of these tariffs is cause for alarm. It is true that Guyana’s primary exports—oil, gold, and aluminum ore—are exempt. But the more pressing issue is not what remains untaxed but what is left of Guyana’s non-oil export base. The government seems to have resigned itself to a single-commodity future, where the economy lives or dies by the price of crude. If, as expected, oil accounts for 89% of Guyana’s exports this year, then the country is teetering on an economic tightrope, entirely at the mercy of global price swings, geopolitical machinations and America’s unpredictability. The slightest tremor in oil markets could send the entire economy into freefall. And worst of all what happens should Trump decides to no longer exempt oil and gold from his reciprocal measures?

Diversification, the golden rule of economic resilience, is a principle that appears to have eluded the PPP government. It does not seem to trouble Jagdeo that Guyana’s economic well-being rests almost exclusively on the fortunes of a single commodity. Nor does he seem particularly perturbed by the fact that the remaining sectors—those which now face Trump’s tariffs—are precisely the ones that could have provided a buffer against oil dependency. Instead, he has chosen the path of least resistance: minimize the problem, dismiss the concerns, and hope that the headlines move on before anyone asks difficult questions.

Jagdeo, in an attempt to exude omniscience, declared that the tariffs were not unexpected. If so, then one must ask: where were the contingency plans? What preemptive measures were put in place to protect local exporters from the predictable fallout?

If this was all foreseen, why was there no consultation with the private sector, no joint strategy, no public discourse on how Guyana would navigate this economic turbulence? Instead, the Finance Ministry’s initial response was to say it would engage the U.S. to seek clarification—an admission that, contrary to Jagdeo’s claims, the government was caught off guard.

And what of Secretary of State, Marco Rubio’s recent visit? One would have expected that the foreseen possibility would have been raised, that Guyanese officials would have used the opportunity to voice concerns and seek assurances.

Yet, instead of robust diplomacy, we saw a display of political sycophancy. The PPP leadership was too busy basking in Rubio’s praise of Guyana’s economic trajectory to ask uncomfortable questions. It seems that when compliments are being handed out, national interests can take a back seat.

At the heart of this debacle is a fundamental failure of governance.  The PPPC government has once again demonstrated that decision-making within the PPP is an insular affair, confined to a small circle of officials who operate under the assumption that they alone possess wisdom. There is no inclusivity. The private sector, the very people most affected by these tariffs, was left out of the loop.

The reality is that these tariffs—whether Jagdeo admits it or not—will have consequences. They will affect businesses, jobs, and trade relations. They will limit the ability of Guyanese exporters to remain competitive in the U.S. market. And they will serve as a stark reminder that Guyana, despite its newfound oil wealth, remains vulnerable to external economic pressures.

Jagdeo may think he can talk his way out of this crisis, as he has with so many others. But rhetoric is no substitute for strategy. At some point, the people of Guyana will have to ask themselves whether they are willing to accept this style of governance. Until then, Jagdeo will continue to do what he does best: talk in circles, evade scrutiny, and hope that no one notices the emperor has no clothes.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)   

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