Source: www.caribbeannewsglobal.com, News Editor, First Published Nov 2otht, 2025 Given the shift in United States trade policy this year, governments in the region should diversify their trade relations and strengthen regional integration, according to the latest annual report by the Economic Commission for Latin America and the Caribbean (ECLAC) on the region’s trade performance, which was presented today. In the report entitled International Trade Outlook for Latin America and the Caribbean 2025: International trade in a new era of weaponized interdependence – unveiled at a press conference by the United Nations regional organization’s executive secretary, José Manuel Salazar-Xirinachs – ECLAC recommends that countries avoid adopting measures that could increase uncertainty in a context marked by major disruptions and geopolitical tensions in world trade. In its three chapters, the document details the recent evolution of the region’s trade along with projections, analyzing in particular the impact that the new United States trade policy has had on the region’s countries. It also analyses the challenge of increasing the technology intensity and advanced human capital intensity of goods and services exports from Latin America and the Caribbean. According to the document, as a result of the various tariff hikes implemented by the United States since February 2025, Latin American and Caribbean countries face, on average, an effective tariff rate of around 10 percent in that country, which is 7 percentage points lower than the average imposed globally. The highest average tariff is faced by Brazil (33%), followed by Uruguay (20%) and Nicaragua (18%). Mexico is subject to an average effective tariff of 8 percent, since the majority of its exports enter tariff-free, either because they benefit from the Agreement between the United States of America, the United Mexican States and Canada (USMCA) or because they are exempted from the hikes. Overall, the countries of Latin America and the Caribbean CARIBBEAN COUNTRIES SHOULD DIVERSIFY THEIR TRADE RELATIONS AND STRENGTHEN REGIONAL INTEGRATION face lower tariffs in the United States than several of that country’s main trading partners, particularly from Asia. This situation creates opportunities for trade diversion in favor of the region’s exports, in sectors such as clothing, medical devices and agro-industry, ECLAC indicates. Meanwhile, there is evidence that the uncertainty generated by the changes in US trade policy is affecting Foreign Direct Investment (FDI) flows to the region, especially in sectors that account for a large share of exports to that market, the report states. In the first half of 2025, FDI project announcements in the region totaled $31.374 billion, down 53 percent from the same period in 2024 and 37 percent lower than the 2015-2024 average. To address this situation, ECLAC recommends that the region’s countries deepen their trade relations with partners such as China, the European Union, India, the Association of Southeast Asian Nations (ASEAN), the Cooperation Council for the Arab States of the Gulf, and the African Continental Free Trade Area. In addition, it 11 BUSINESS VIEW CARIBBEAN VOLUME 12, ISSUE 11 OPENING LINES
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