Since Wednesday, April 2, when the US government announced tariff increases on merchandise from the majority of countries in the world, including Belize, our top financial minds in government have been working overtime to defend our economy from the strong winds blowing against us. In a statement to nations in the Caribbean, the Chair of CARICOM, Hon. Mia Mottley, the PM of Barbados, said that, with the tariff increases added on to the other problems we are already facing, “these are among the most challenging of times for our region since the majority of our members gained their independence.” She predicted that the trade war (China, whose goods received the highest tariffs, 34%, has retaliated by placing equally exorbitant tariffs on US products, resulting in a U.S. declaration of 125% tariff against that country) will mean higher prices in every sector of economies in the Caribbean.
Simply put, small economies like ours can’t compete with the giant Americans. As Ms. Mottley explained, “It is because of our small size, our great vulnerability, our limited manufacturing capacity, our inability to distort trade in any way, that successive United States administrations included, and most recently, the Reagan administration in the early 1980s went to great lengths to assist us in promoting our abilities to sell in the United States under the Caribbean Basin Initiative.”
The US government says the tariffs are reciprocal, tit for tat. The Office of the United States Trade Representative explains that it’s all about balancing bilateral trade deficits between the US and its trading partners. The US Trade Representative Office further says, “Models of international trade generally assume that trade will balance itself over time, [but] the United States has run persistent current account deficits for five decades, indicating that the core premise of most trade models is incorrect.” That Office goes on to say that the failure is due to many causes, and that the bottom line is that “U.S. consumer demand has been siphoned out of the U.S. economy into the global economy, leading to the closure of more than 90,000 American factories since 1997, and a decline in our manufacturing workforce of more than 6.6 million jobs, more than a third from its peak.”
Free trade agreements beginning in the latter part of the 1900s encouraged American companies to set up shop in countries where workers don’t earn as much as American workers do. Many economists say the trade agreements, and globalization, worked as they planned. The present US government says they have not, and they point to their ever-increasing trade deficit as American consumers purchase goods made in foreign countries, goods which they used to produce at home.
The US is trying to nudge American companies/manufacturers to return their factories to US soil. Americans in favor of the “reciprocal taxes” note the deterioration of some major infrastructure, bridges and highways. But decay of US infrastructure isn’t a symptom of a sputtering economy. Despite the trade deficit, the US economy still dwarfs those of its only superpower rivals, China and Russia. The World Bank reports the 2023 GDP per capita in US dollars for a Chinese citizen to be $12,614, while the amount for a citizen of the Russian Federation is reported to be $13,817, and for a US citizen, $82,769. If there is anything wrong with the US economy, it might be that too much wealth is concentrated in too few hands.
Some observers say the capacity to ramp up its war machine is the real impetus behind US leadership’s push to bring home its factories. In the realm of diplomacy, the US adopted nothing from its former colonizer, the British. The US solves many of its problems militarily. The numbers say more weapons production in the US is mission overkill. Al Jazeera, referencing data on the production of military hardware/expenditure from the Stockholm International Peace Research Institute, said that in 2023 the US “paid out $880bn – more than the next eight countries combined.”
From its birth as a powerhouse in the world, beginning in the mid-1800s after the British vacated the western hemisphere to concentrate its energies in Asia and Africa, the US has said it wasn’t about using its military might to colonize other nations, that all it wanted was an environment where its people could do business. In almost every country south of the Rio Grande, US citizens own businesses that generate wealth for the American economy, and jobs for the natives. Unfortunately, at times US businessmen abroad have been too exploitative, or disrespectful, and progressive governments have had to try and rein them in. The American government always sides with its citizens abroad, even when they are grossly in error.
Colombia wasn’t compliant, and the US engineered the creation of Panama. Guatemala wanted to distribute fertile idle lands owned by the banana barons, United Fruit Company, to landless small farmers, and the US engineered the overthrow of the Guatemalan government. The country would fall under military rule, to dictators who were merciless, and it would lead to a terrible civil war. Dictators in Cuba, the Dominican Republic, Haiti, and Nicaragua trampled on the rights of their people, but the US supported them because their countries were open fields for US businessmen to play in.
Almost everything the US has asked us to do in respect to our economy, we have done. In its early days, the present party in power loved the US so much that they marched under the Stars and Stripes, and sang the “Star Spangled Banner” at public meetings. The US made us give up the mixed economy for privatization, to our detriment; when we promoted cooperative farming, their agents here hollered communism, and our governments backed off and cut subsidies to farmers.
In the political world, we stand with the US, as long as it is respectful of our rights and consistent with our principles. We rejected a US initiative, the Webster’s Proposals of 1968, that would have made us effectively a satellite state of Guatemala. We do not accept the US’s wish that we support the atrocities of the Netanyahu government in Gaza. Belize is not pro-Hamas; Belize is anti-genocide. Belize is anti the killing and deprivation of any of God’s children. We appreciate the nostalgia of Cubans in Florida, but we favor the Cuban Revolution. After 60 plus years, the US must end its crippling embargo on its island neighbor. We call on the US to develop a more progressive policy toward Haiti. We advocate for Taiwan because we support the right of any country to determine its future. We condemn apartheid, injustice, everywhere.
Now, suddenly, there is tremendous upheaval on the economic front. We are not the intended target in this trade war, but in this extremely interconnected world, we will feel the lik.
Inflation has reduced the purchasing power of our dollar between 20 and 30 percent since 2020, and just when we thought those high inflation days were behind us, the US initiates a trade war. Plan Belize 2.0 carries over the promise that all Belizeans will win, vamos bien with the PUP, and we can’t accept less. Many of us experienced difficult economic times in 2020-2025, but we saw our government working; our leaders stayed away from the mistakes of 1993-98 (retrenchment) and 1998-2003 (privatization), thus we returned the PUP to government in the 2025 election, resoundingly.
Today we are in lik way; the task for our leaders just got tougher. The Leader of the Opposition, Hon. Tracy Panton, has called for a united approach. At this time especially, we need our leaders to be giants.
P.S. On Wednesday, April 9, the US announced a 90-day pause of their tariff plan against some countries. That might lessen the blow, and we should be thankful for small mercies.