This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact The Epoch Times Reprints.
Freight trucks pass through customs before entering the United States at the Otay Mesa port of entry in San Diego, in an undated file photo. John Moore/Getty Images
As the United States navigates complex global trade dynamics, President Donald Trump can look to the future without undermining past progress.
For starters, it is crucial to preserve the strength of duty-free trade from the countries of the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). This successful trade agreement has supported a critical, interdependent Western Hemisphere supply chain for U.S. companies, resulting in greater trade throughout the region. Because of CAFTA-DR, the United States has maintained a trade surplus on goods and services with the countries under the trade agreement—most notably El Salvador, Guatemala, and Honduras—that highlights its positive impact on American exports. This surplus amounts to billions of dollars, supporting “Made-in-America” jobs and unlocking key opportunities for U.S. workers.
Strengthening our regional partnerships through trade aligns with the Trump administration’s “America First” agenda by promoting domestic job creation and enhancing U.S. competitiveness. Agreements like CAFTA-DR also lay the foundation for continuous growth that contributes to the rebalancing of manufacturing, especially as the United States seeks to counterbalance China-led supply chains globally.
The Trump administration’s recent 10 percent global tariff—intended to enhance the competitiveness of U.S. companies—may very well end up disrupting supply chains in the Western Hemisphere that are vital to American businesses and workers, particularly within key sectors such as manufacturing and agriculture. For example, in the automotive industry, U.S. companies depend on certain sub-assemblies and components produced in CAFTA-DR countries, and these processes are vital for maintaining production schedules. The continuation of global tariffs on these goods would interfere with these essential supply chains, potentially adversely affecting U.S. manufacturing and employment.
In the textile and apparel sector, the CAFTA-DR agreement ensures demand for U.S. cotton, yarns, and other components, supporting more than 470,000 jobs in the United States, according to the National Council of Textile Organizations. In fact, the textile and apparel sector accounts for $34 billion in annual two-way trade between the United States and Western Hemisphere countries, translating into 2.6 million jobs in total. It has proven agile and dependable, particularly during global economic disruptions like the COVID-19 pandemic.
Facilities throughout Central America do not merely produce goods; they significantly rely on imports, materials, and services that bolster U.S. operations, workforce development, and overall competitiveness. Remember that the CAFTA-DR countries represent a top 10 agricultural market for U.S. exporters, and the second-largest U.S. export market overall in Latin America (behind only Mexico).
Such statistics cannot be taken lightly. It is up to U.S. policymakers to consider the long-term impact of global tariffs on CAFTA-DR goods and those they benefit.
Mexico and Canada have received similar tariff exemptions under the United States-Mexico-Canada Agreement (USMCA) agreement to benefit the American economy. Now, what about the rest of Latin America?
It is crucial to acknowledge that many of USMCA’s own supply chains and partnerships rely on the competitiveness of the CAFTA-DR agreement. Leaving CAFTA-DR at a disadvantage would only weaken U.S. economic interests as well as the regional stability, strength, and cooperation that we have worked so hard to improve over decades.
To protect a critically important market to the United States, the Trump administration would be best served exempting CAFTA-DR-qualifying goods from the 10 percent global tariff. It is a matter of immense strategic importance.
Trade policy requires a thoughtful approach that balances geopolitical dynamics with the needs of American businesses and workers. By taking this step, the United States can strengthen its economic position while fostering a more resilient and competitive supply chain.
Trump and other policymakers may be right to reevaluate our various trade relationships, but good deals have been negotiated in the past. CAFTA-DR is one of them, and the countries involved deserve a tariff exemption that benefits the United States in return.
Protecting CAFTA-DR would be a win-win for the U.S. economy, supporting jobs, businesses, and the “America First” agenda. There is no need to fix what isn’t broken.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
