The White House has announced new trade agreements with four South and Central American countries: Argentina, Guatemala, El Salvador and Ecuador. Like previously announced frameworks with Europe and Asian nations, the proposed deals include a commitment from all four countries to refrain from imposing digital services taxes and address intellectual property disputes.

Existing tariff rates on most imports remain unchanged, however, with products from Ecuador still subject to a 15% duty and goods from Argentina, Guatemala and El Salvador at 10%.

A White House official told Politico that “full agreements on reciprocal trade” for most of those countries would be ready within two weeks and suggested there will be “some tariff relief on certain products or goods.”

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Tariff Relief For Apparel?

Certain textile and apparel products from Guatemala and El Salvador will be exempt from tariffs under the new agreements with those countries. This brings welcome relief for U.S. textile and apparel producers, including many promo companies with significant operations there, like Gildan and Hanesbrands.

The agreements would apply exemptions to goods “originating under the CAFTA-DR” – the Dominican Republic-Central America Free Trade Agreement between the United States and a group of smaller Central American neighbors. It was signed in 2004, approved by Congress in 2005 and took effect in 2006. According to the Office of the U.S. Trade Representative,

  • U.S. goods imports from CAFTA-DR totaled $35.6 billion in 2022
  • U.S. exports to CAFTA-DR accounted for 2.3% of overall U.S. exports in 2022.
  • The U.S. goods trade surplus with CAFTA-DR was $12.7 billion in 2022.

U.S. Trade Representative Jamieson Greer also met this week with trade officials from Switzerland and Lichtenstein and announced a deal that includes a tariff rate no higher than 15% (the same as the European Union) for goods from those two countries.