LCN Newsroom · News Analysis
Foreign Secretary Robert Persaud says the 12.5 per cent tariff changes nothing, because oil and gold are exempt and the rate is lower than last year’s. He is right about the money, almost all of which is oil. He is wrong about the businesses, almost all of which are not.
Guyana’s government says the new 12.5 per cent US tariff imposes no new burden on exporters because it is lower than the rates that preceded it and because oil, gas and gold are exempt. That is true at the national level, where oil is almost the entire export figure. It is not true for rum, seafood and processed-food producers, who are inside the tariff and whose combined US sales are a rounding error in the national total. The government is pursuing an exemption while a reciprocal trade agreement is negotiated.
What the government said
In a statement issued on Friday and reported by Demerara Waves, Foreign Secretary Robert Persaud set out the government’s position on the 12.5 per cent duty that took effect on 24 July. He made six claims, and they are worth separating because some hold and some do not.
The tariff is not new, he said, but a replacement for the 10 per cent global rate that expired the same day under Section 122 of the Trade Act. It sits at the end of a falling line, from 38 per cent announced in April 2025, to 15, to an interim 10, and now 12.5. It does not touch oil or gold. Guyana was not singled out, since the same action covers 60 economies. The measure comes from a domestic American legal process, not a judgment on Guyana. And the government will pursue an exemption while it finalises an Agreement on Reciprocal Trade.
Read as reassurance, the statement works. Read as analysis, it answers a question most exporters were not asking and skips the one they were.
Where the government is right
Two of the claims are simply correct, and it is worth saying so plainly.
Oil and gold are exempt. Guyana’s crude walks through the tariff wall untouched, and crude is almost the entire export relationship with the United States. Guyana sold the United States about US$6.73 billion in goods in 2025, and the overwhelming majority of that was petroleum. Measured as a national aggregate, the tariff genuinely does not move the number, because the number is oil and oil is exempt.
The rate is also lower than what came before. The distinction between a replacement and an addition is real. An exporter who paid the interim 10 per cent now pays 12.5, which is a 2.5-point increase, not a 12.5-point one. The government is right to correct anyone reporting this as a brand-new 12.5 per cent charge landing on top of free trade. It is not that.
On the political framing, Persaud is also broadly right that Guyana was not singled out. The action is a Section 301 measure covering 60 economies, and Guyana sits in a large group. That is accurate, and it is a reasonable thing for a government to stress.
Where it does not hold
The phrase that will not survive contact with a manufacturer is “no new or additional burden on Guyanese exporters.” The aggregate carries no new burden. Individual exporters do, and the reason the two statements can both be uttered in the same breath is that oil is so large it hides everyone else.
Consider what actually sits inside the tariff. Rum and spirits. Guyana exported about US$7 million of beverages and spirits to the United States in 2025, most of it rum. Seafood. Processed food. The prepared-food and molasses trade that, by the US Commerce Department’s own account, doubled over five years and now spans jams, coconut milk, spices and pasta. These are the categories the 12.5 per cent falls on, because everything petroleum is exempt.
Set the two figures beside each other. Rum to the United States, roughly US$7 million. Total exports to the United States, US$6.73 billion. The taxed sector is around one-tenth of one per cent of the export relationship. That is precisely why the government can say the tariff imposes no burden and precisely why a rum distiller or a shrimp exporter would disagree.
They are the rounding error. The rounding error still has to pay.
For a producer selling into a US supermarket on a thin margin against Caribbean and Latin American competitors, 2.5 additional points is not trivial. It is the difference between holding a shelf listing and losing it. It does not close the firm. It quietly ends the account, and a lost US listing is far harder to regain than to keep. None of that appears in a national trade statistic, which is the whole problem with defending the position at the national level.
The contradiction inside the government’s own strategy
The most revealing part of the government’s case is not in Friday’s statement. It is in the strategy the government used successfully before, and in a question the current statement leaves open.
When Guyana lobbied down last year’s rate, the winning argument, as Vice President Bharrat Jagdeo explained, was that Guyana’s trade surplus with the United States is almost entirely oil. Washington, he said, understood the surplus was not the product of unfair currency practices or protective barriers, and treated Guyana more gently as a result. That argument worked. Whether it is the argument the government intends to run again is not something Friday’s statement says. Persaud confirmed only that Guyana will pursue an exemption while finalising the reciprocal trade agreement. He did not say on what basis.
Here is the difficulty, and it is a question the government should be pressed to answer rather than a conclusion to assume. If the exemption is argued the way the last one was, on the strength of a surplus that is almost entirely oil, it protects the sector that does not need protecting, because oil is already exempt, and leaves the taxed sectors where they are. A case built on oil economics is a case on behalf of oil. The rum distiller would once again be the passenger, riding on an argument built around a cargo that was never taxed. If instead the government intends a sector-specific case for manufacturers, that would be the more useful route, and it has not yet said which it will take.
This is not to say the exemption effort is wrong. It is to say that the exporters who most need it risk being the least visible in the case made for them, and that the government has not yet told manufacturers whether their sectors will be named specifically or folded into a national argument that oil dominates.
The claim the government did not make
Notice what is absent. The statement does not say Guyana has enacted, or will enact, a prohibition on the importation of goods made with forced labour.
That absence is the entire reason Guyana sits at 12.5 rather than 10.
USTR’s distinction was never about whether a country produces goods with forced labour. It was about whether a country blocks the import of such goods. Guyana’s own testimony confirmed the Customs Act power to do so exists and has never been used. Trinidad and Tobago, placed in the same band as Guyana in June, moved to 10 per cent after its trade minister announced exactly such a prohibition. Guyana pursuing an exemption is asking to be excused from the test. Enacting a prohibition would be passing it. The second route is the one that demonstrably worked for a neighbour six weeks ago.
There is also a smaller factual wrinkle worth flagging. Persaud said 16 economies face continued investigation and Guyana is not among them, offered as reassurance. On the record it cuts the other way. Being outside the group still under investigation means Guyana’s rate is settled at 12.5, not that it escaped scrutiny. The countries that moved to 10 did so by acting, not by avoiding a list.
Why this matters for the diversification project
The awkwardness runs deeper than one tariff, because the taxed sector is the sector the state has been pouring money into. Agriculture is roughly 23 per cent of Guyana’s non-oil economy, and the 2025 budget put more than US$500 million into processing infrastructure, silos, abattoirs, food labs, cold chain. Every dollar of that is aimed at building exactly the value-added, non-oil exports that the 12.5 per cent now taxes on entry to the United States.
The country is trying to graduate from a raw-commodity economy to a manufacturing one. The tariff structure rewards staying raw. Crude and gold, the unprocessed exports, pass free. Processed food, the thing diversification is supposed to produce, pays. A government serious about the diversification story has a particular reason to fight this tariff, and it is not the reason its current aggregate-level defence emphasises.
Guyanese agro-processors have already crossed onto US shelves, as LCN has reported in following the firms doing it. Those are the businesses that now absorb the increase, and they are carrying it on top of the certification and standards costs that reaching those shelves already demanded. The window for this class of exporter, one this newsroom has argued is narrow, does not widen because the national aggregate looks calm.
What a manufacturer should take from this
The government’s reassurance is accurate about the country and silent about the firm. If you export oil or gold, it changes nothing. If you export rum, seafood, processed food or any manufactured good, you are paying 2.5 points more than you did a week ago, indefinitely, and the national conversation is describing your situation as unchanged.
Check your product’s tariff line against the exclusion annex, because some agricultural goods are exempt and you may be carrying a cost you do not owe, or assuming an exemption you do not have. Read your US contracts to see who bears the duty. And press, through the GMSA and directly, for the exemption case to name your sector specifically rather than resting on oil economics that describe someone else’s business.
Frequently Asked Questions
Is the government correct that the tariff is not new?
Largely yes. It replaces the interim 10 per cent surcharge that expired on 24 July rather than adding to it, so for most exporters the real change is an increase of 2.5 percentage points, not a new 12.5 per cent charge.
Is it correct that exporters face no new burden?
Only at the national level. Oil and gold are exempt and dominate the export total, so the aggregate barely moves. Non-oil exporters, in rum, seafood and processed food, do carry a higher duty.
Which Guyanese exports are taxed?
Non-exempt goods, chiefly rum and spirits, seafood, processed and prepared foods, and light manufactured goods. Crude petroleum, natural gas, refined products and gold are exempt.
Why is Guyana at 12.5 per cent and Trinidad at 10?
Trinidad and Tobago announced a forced-labour import prohibition before the deadline. Guyana did not enact one, and its existing Customs Act power to block such imports has never been used.
Will the exemption the government is seeking help manufacturers?
Only if it is granted and applies to their goods. The argument that won relief before rested on oil economics, and oil is already exempt, so manufacturers have reason to want the case made specifically for their sectors.
Sources
Demerara Waves, Guyana says new US forced-labour tariff will not burden exporters, 24 July 2026. Guyana Times, Guyana to pursue exemption as US imposes 12.5% tariff, 25 July 2026. Office of the United States Trade Representative, final action, 23 July 2026. US Department of Commerce, Guyana Agriculture Sector guide and Market Overview. Trade figures from the UN COMTRADE database as reported by Trading Economics.
This analysis is drawn from the government’s public statements as reported, from the USTR record, and from published trade data. Export values are 2025 figures and are cited to indicate scale rather than as audited totals
