The announcement made by the president of the United States comes after the Guatemalan Constitutional Court issued a ruling in which it limits its foreign policy functions to the Executive, by granting a provisional injunction that prevents the negotiation or signing of any agreement.
The appeal, which was presented by a group of former foreign ministers, a former presidential candidate and the Human Rights Ombudsman, seeks to prevent President Jimmy Morales from signing an agreement with the U.S. government to make Guatemala a Safe Third Country for immigrants seeking asylum from the U.S. government.
Juan Carlos Tefel, president of the Committee of Agricultural, Commercial, Industrial, and Financial Associations (Cacif), explained to Prensalibre.com that "... there is concern about President Trump's statements and warnings. (It's about) 35% of the country's exports, for more than US$4 billion and for remittances of US$9 billion and more than one million people would be affected by employment if they put these tariffs on Guatemalan products'."
Alejandro Ceballos, president of the Apparel and Textile Commission (Vestex), attached to the Guatemalan Association of Exporters (Agexport), stated that "... Guatemala depends on the U.S. economy and classified it as a 'strategic error' in terms of trade and market, if the tariff is implemented. In any case, if it is complied with, it would be 'fatal' for the national production, because of the dependence on commercial exchange as well as in sending transfers. This would kill the economy and provoke more migration. For the businessmen, it would put an end to business."
The outlook for the region has changed, since days ago CentralAmericaData reported that in the revision of the FTA the authorities of Central America and the U.S. ruled out that the U.S. government had plans to apply trade sanctions against Central American countries in retaliation for the deepening of the immigration problem.
Guatemalan exporters report that President Trump's warning about export tariffs and taxes on remittances and transfers is raising doubts among U.S. buyers.
Uncertainty prevails among most Guatemalan businessmen after President Trump reacted to the provisional protection established by the Guatemalan Constitutional Court, which limits the functions of the Executive Branch to negotiate or sign any foreign policy agreement.
In the NAFTA review carried out by the Central American and U.S. authorities, it is ruled out that the U.S. government will apply trade sanctions in retaliation for the deepening of the migration problem.
After the Trump administration pressured Mexico with the threat of increased tariffs on Mexican imports, the region has generated expectations for the planned review of the NAFTA with Central America.
During the first two months of the year, exports of the Guatemalan textile sector registered a 4% year-on-year increase, which is explained by demand from U.S. companies.
According to the most recent figures from the Bank of Guatemala, between the first two months of 2018 and the same period in 2019, overall exports fell from $1.808 million to $1.751 million.
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