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  • 3 months ago
Economist Dr. Vaalmikki Arjoon is warning that the 15 percent tariff on Trinidad and Tobago, recently imposed by the Trump administration, will deal a blow to the local economy particularly by reducing vital foreign exchange earnings.

More from Nicole M Romany.
Transcript
00:00Economist Dr. Valmiki Arjun says the new 15% tariff will hit businesses hard,
00:07warning that the measure threatens the country's import and export earnings.
00:13He cautions that the sector is now at risk,
00:16as the added costs will make TT's goods less competitive in the United States markets.
00:22When the U.S. importers purchase TT goods directly from Trinidad and Tobago,
00:28they now have to pay on top of that an additional 15%, making that good more expensive.
00:34Of course, the importer is not likely to absorb this cost.
00:37He's very unlikely to absorb this cost himself, so he would pass it on to the U.S. consumer
00:42in the form of whoever's purchasing these goods at the end of the day in the form of higher prices,
00:47which will shrink or lower the demand overall for our commodities.
00:51The Economist adds that local businesses importing goods from the U.S.
00:57will also face higher costs, with increased VAT and other duties adding to the burden.
01:03He describes it as a spiraling domino effect.
01:07Because when you need this more foreign exchange, again, the banks are not likely to supplement this
01:12because of the limited reserves in the country.
01:15And as a result of that, where would they go to?
01:17They go to the black market.
01:18If the demand in the black market goes up, then the black market rate also goes up.
01:22So you're looking there at basically a triple whammy.
01:25Dr. Arjun says the government needs to also focus on alternative ways to boost the economy and earn forex.
01:34He notes that steps can be taken to streamline the regulatory environment and environmental clearances
01:41to reduce the bureaucratic delays in energy projects.
01:44And of course, when you do that, you boost investor confidence.
01:48And other entities that are looking on internationally, they would in turn be more inclined to enter into our markets.
01:55So I think it's important going forward, just like we were able to get Exxon to come back into TNT,
02:00we also look at other energy entities globally to try to come into TNT and make the atmosphere even more competitive.
02:08He adds that the focus should not only be on large companies,
02:12but also on attracting small and medium-sized, globally recognized entities.
02:18Nicole M. Romani, TV6 News.
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