In the wake of the Trump administration’s imposition of a 10% tax on Jamaican exports, the government of Jamaica is encouraging local businesses to explore new markets even as it seeks more “urgent clarification.”

The tariff was one of the central issues Prime Minister Andrew Holness addressed while speaking to business leaders at the National Indoor Sports Centre at the opening ceremony of its exposition held in Kingston, Jamaica, last Thursday.

According to Prime Minister Holness, while formal details about the new tariff’s application, particularly its impact on Caribbean Basin Initiative requirements, are unknown, the government actively engages with US trade representatives “to seek urgent clarification.”

Holness noted that the government is undertaking a technical review to determine the scope of the levy and its consequences for Jamaican trade and industrial policy.

In further explaining, Holness said, “Still, we will use every available diplomatic channel, including working with our CARICOM brothers and sisters and utilizing the Office of Trade Negotiations, to seek and  to preserve the positions of export that have been secured over decades of deepening trade ties with the United States.”

He added that, according to preliminary research, some of Jamaica’s significant exports may be free from the new tax, and the government is trying to confirm and perhaps increase these exclusions.

“So, to our manufacturers and exporters, we understand the uncertainty this announcement has created, and we are with you ever step of the way. You are not only an integral part of our economic strategy, but you are also a national champion of our resilience and ingenuity,” he noted.

Holness continued, “The government will continue to advocate on your behalf and ensure that your interests are protected in any new global trade architecture.”

The prime minister said Jamaica would not sit by and watch the disruption but instead be innovative and find new opportunities. “So, while we see the downside of the disruptive global order that we have known, we are not going to sit by and wait.”

Some opportunities must be had. There are prospects to be uncovered.  Holness urged manufacturers, “My business people – before you start to look at the negative, also look for the opportunities. Don’t just sit down and say, you know, complain about all the things that are going on and all the things that are going bad, expecting that the government is going to solve all the problems for you. Be the entrepreneur, be the one who is the risk taker, be the one who is looking for the opportunity,” the prime minister told the group of business leaders.

Economist and Academic Researcher Keenan Falconer explained and noted that the 10% import taxes imposed on Jamaican exports will make it more costly for US importers to import Jamaican goods into their nation.

Falconer said that Jamaican exporters might choose to cut prices or export quantities to be competitive in the US market.

In continuing, Falconer added that the American food and beverage export market consists of many diasporic Jamaicans who are prepared to buy products for reasons other than the price, such as cultural and quality concerns or the absence of appropriate alternatives. He said that the market might remain in good standing in such cases.

Falconer further noted, “Therefore, those products could be price inelastic and would hold up well against the imposition of tariffs. Jamaican non-food exports may be a little more price elastic, and consumption could shift away from them to alternatives from other countries.”

He  suggested that Jamaican businesses look beyond the United States: “However, I think the new tariff regime opens opportunities to consider future diversification away from the American market, both for exports and engaging directly with countries for imports without the US as an intermediate destination.”