Economic threats loom for Caribbean nations in Trump 2.0

Andy Knight

Prof. Andy Knight, University of Alberta has written a clear summary of the risks that the new Trump Administration presents for the Caribbean.

The Caribbean Camera Inc. on January 28, 2025

By Andy Knight

Donald Trump, a convicted felon, was inaugurated as President of the United States on Monday.

This is Trump’s second kick at the can and Trump 2.0 promises to be even more chaotic than the first time he won the presidency.

For Trinidad and Tobago, and the rest of the Caribbean, Trump 2.0 ought to be treated with significant concern. This time around, Trump is intent on shaking up the US bureaucracy, challenging long held norms, and advancing major foreign and domestic policies that could inevitably have negative impacts for countries in geographical proximity to the United States.

First, Trinidad and Tobago, as well as other CARICOM countries, ought to be concerned with Trump’s Immigration Policy. Trump 2.0 is likely to result in much stricter immigration laws, affecting Caribbean nationals, particularly those from Trinidad and Tobago, who may face challenges when traveling to or living in the United States. Trump has promised massive deportations of “aliens” living in the US. This could include not only Caribbean individuals living illegally in the US, but also some who are currently there as foreign workers or with green cards. But the major negative impact of Trump’s new immigration policy could very well be the drying up of remittances coming from the US that normally benefit large numbers of families living in the Caribbean.

The size of remittances going into Trinidad and Tobago from the US is significant. According to a recent study, the non-immigrant temporary worker group is the largest single source of remittances, potentially sending up to $15 billion to Trinidad and Tobago annually.

According to historical data, remittances from the US into Trinidad and Tobago averaged $105.62 million from 2001 to 2013, with a record high of $131 million in 2011. A look at more recent data shows that personal remittances paid in Trinidad and Tobago were reported at $148.6 million in 2023. So the loss of remittances could very well be significant for those countries and peoples in the Caribbean that depend on this source of revenue.

Second, Trump 2.0’s Trade and Economic Relations policy is going to be an “America First” policy. Such a policy is likely to lead to several trade tensions and potential economic losses for Caribbean countries, including Trinidad and Tobago, which rely so heavily on trade with the US.

Trinidad and Tobago’s trade relations with the U.S. are quite significant. In 1996, the U.S. supplied roughly 37.5 per cent of Trinidad and Tobago’s total imports, and this number rose to approximately 48.2 per cent in 1997. The country’s imports from the U.S. include machinery and other goods, with a notable increase in machinery imports for petrochemical plants in 1997.

With respect to exports, Trinidad and Tobago’s exports to the U.S. accounted for a substantial portion of its total exports, with $941 million in 1995, $1.094 billion in 1996, and $1.005 billion in 1997. The country’s trade balance with the U.S. has fluctuated over the years, with a deficit of $206 million in 1997.

It is quite possible that Trump’s “America first” trade and economic policy, including placing tariffs on certain imports coming into the U.S., could have a negative impact on Trinidad and Tobago’s economy.

Third, it is likely that the new Trump administration will pursue a Security and Counter-Terrorism strategy aimed at Venezuela and Cuba with the collaboration and assistance of some Caribbean countries. This security strategy aimed at increasing the Trump administration’s focus on counter- terrorism efforts in the Caribbean, could potentially lead to increased cooperation between the US and a few Caribbean countries on security issues. It is the kind of policy that could split CARICOM, as we saw happening during Trump’s first presidency.

Fourth, there is the issue of Climate Change and Energy Policy. Trump is a climate change denier and his new Cabinet is likely to hold a similar position as Trump. His stance on climate change and energy policy will have a negative impact on Caribbean countries’ efforts to transition to renewable energy sources and address climate change-related challenges. Mia Mottley, the Prime Minister of Barbados, is well aware of this possibility and as the new head of CARICOM, she will certainly butt heads with Trump’s cabinet members who doesn’t care much about the Caribbean’s concern with sea level rise and the manifold natural disaster that are related to global warming and greenhouse gas emissions.

Fifth, and finally, there is the challenge of Trump’s Regional Diplomacy. The new Trump presidency is bound to lead to changes in US diplomatic engagement with the Caribbean region, potentially affecting relationships between the US and individual Caribbean countries. I see the prospects of a divide and conquer regional diplomatic strategy by the new Trump administration that could pit Jamaica, the Bahamas, St Lucia, and the Dominican Republic against Trinidad and Tobago, Barbados, St Vincent, Grenada, and other CARICOM members.

This is not a far fetched idea. We know, for example that the first Trump administration’s policies and actions created divisions within CARICOM. One key area of that division was the varying responses to Trump’s meetings with select Caribbean leaders. In March 2019, Trump met with the leaders of St Lucia, the Dominican Republic, Jamaica, Haiti, and the Bahamas, which some saw as an attempt to split CARICOM.

Some Caribbean countries, particularly those that were not invited to those meetings, felt that this selective engagement undermined CARICOM’s unity and collective bargaining power. This perception was exacerbated by concerns that the first Trump administration was seeking to exploit regional divisions and advance its own interests in the Caribbean. This, of course, is linked to Trump’s policy of keeping China out of America’s backyard.

Additionally, the first Trump administration’s policies on issues like trade, immigration, and climate change also created tensions within CARICOM. Some member states were more supportive of Trump’s policies, while others were strongly opposed, leading to divisions within the organization.

The Caribbean’s biggest concern with Trump 2.0 may very well hinge on the extent to which Trump’s new regional diplomacy will create divisions within CARICOM, thus posing challenges to regional unity among small states in the Caribbean — states that are already faced with formidable external pressures and varying national interests.

In Trinidad and Tobago, as well as in the rest of the Caribbean, state leaders must grapple with the negative impacts of a Trump 2.0 administration. Certainly, Agenda 2025, while not explicitly targeting the Caribbean as a region, should be a cause of concern for these small states in the backyard of the US.

Countries like Canada and Mexico are taking seriously the threats to their sovereign, which at this point is more rhetorical than real. Trinidad and Tobago along with their Caribbean sister-states should be doing likewise.

Andy Knight is a professor at the University of Alberta and former director of the Institute of International Relations, University of the West Indies.

Source: The Caribbean Camera

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