This article was originally published in Diario La Hora on June 27, 2025.
On April 2, 2025, President Trump signed Executive Order 14257, invoking laws like the International Emergency Economic Powers Act (IEEPA) and the Trade Act of 1974. Declaring a national emergency on what he called “National Liberation Day,” he cited ongoing trade deficits as “an unusual and extraordinary threat to the national security and economy of the United States.” In response, he slapped an additional 10% tariff on all imports—on top of any existing duties. Guatemala, like most Latin American nations, was hit with this base rate, while countries like Guyana (38%), Nicaragua (18%), and Venezuela (15%) faced steeper penalties. Mexico received preferential treatment and was exempt from the new across-the-board tariffs, though existing duties still apply to certain sectors, like automotive.
A week later, on April 9, the White House fine-tuned the policy: it temporarily lowered tariffs to 10% for most countries listed in the Annex, calling it a “gesture” toward those open to “dialogue.” This pause expires on July 9, when differentiated rates could return. Guatemala wouldn’t be affected—its rate was already set at the 10% baseline. China, meanwhile, entered a tit-for-tat tariff battle with the U.S. in April, but on June 25 both sides inked a deal: China would resume rare earth exports in exchange for a partial rollback of U.S. countermeasures.
EO 14257 leaves the door open for future tariff reductions if certain conditions are met. Section 4(c) states that countries taking “significant steps” to fix non-reciprocal trade relations and align with U.S. national security and economic goals could qualify for lower or limited tariffs. The order lists key structural barriers that, if addressed, could unlock such benefits: removing discriminatory technical standards, easing licensing rules, eliminating unjustified sanitary restrictions, strengthening IP enforcement, curbing distorting subsidies and anti-competitive practices, and boosting domestic consumption over wage suppression or export subsidies. On top of that, Trump reserves the right to tweak tariffs based on three added triggers: (a) if trade partners retaliate (4b); (b) if U.S. manufacturing keeps declining (4d); or (c) if tariffs don’t shrink the trade deficit (4a).
Lately, Guatemala has taken a series of steps that seem designed to hit these benchmarks—particularly in areas sensitive to Trump’s administration, like security and migration. One example is the Puerto Quetzal expansion project, being developed with the U.S. Army Corps of Engineers. Besides upgrading logistics infrastructure, the port is expected to host facilities for allied vessels, possibly even for naval use. Another notable move: on June 26, Guatemala signed a deal with the U.S. Department of Homeland Security to share biometric data, upgrade airport controls at La Aurora, and coordinate against transnational threats. That same day, the country also inked a new agreement to host certain asylum seekers from third countries—giving the U.S. another option for off-site migration processing. That agreement, however, has drawn criticism.
While Guatemala’s alignment with U.S. priorities on security and migration is clear, other areas offer potential for quicker wins—starting with intellectual property. The country remains on the Watch List of the U.S. Special 301 Report, which tracks IP protection worldwide. The problem isn’t the laws on the books—it’s how they’re enforced: poor coordination among agencies, little action on piracy and counterfeiting, long registration delays, and undertrained judges. Streamlining these processes—without needing legislative reform—could signal goodwill in Washington’s eyes.
On the regulatory front, addressing concerns about discriminatory rules would likely require passing a Public Administration Law. That’s a long-term structural reform, but it’s becoming increasingly urgent. In the meantime, individual ministries could adopt internal controls to review proposed regulations, ensuring more predictability and fairer treatment for those dealing with the state.
There’s also a domestic U.S. angle that shouldn’t be overlooked. On May 28, the U.S. Court of International Trade briefly blocked the tariffs, finding that the president had overstepped the authority granted by Congress. Under IEEPA, the president can only take emergency action in response to a “foreign” threat. And under Section 122 of the 1974 Trade Act, tariffs tied to trade deficits are capped at 15% for a maximum of 150 days.
Because the new rates—10% globally, up to 25% or more for Mexico, Canada, and China—appeared aimed more at pressuring partners than addressing drug trafficking or the balance of payments, the court ruled the orders invalid. The practical effect? The government would have to stop collecting the extra tariffs and refund what it had already taken in. But just one day later, on May 29, a Court of Appeals reinstated the measures. Now, we wait to see how the case plays out—possibly all the way to the Supreme Court.
Unless U.S. courts ultimately strike down this tariff wave, Guatemala has little room to maneuver. Its bargaining power is negligible, and its best option is to deliver visible progress quickly. Unlike Mexico and Canada—whose strategic relationships earned them special treatment—nearly all other countries, even close allies like Argentina or El Salvador, are stuck with the 10% base rate. For Guatemala, the challenge is greater still: its exporters must compete directly with Mexican producers who are exempt from the surcharge. In this environment, Guatemala’s public and private sectors must act fast to identify areas of reform that will send clear signals to Washington. Targeted progress on IP enforcement or regulatory reform could be meaningful steps in that direction.