Dookeran: Be prepared for Trump’s 'America First' trade policies

FORMER Central Bank governor Winston Dookeran believes that while Donald Trump's "America First" policy may cause significant shifts in global trade, there is no need for panic – but there is a clear need for preparedness.

Dookeran warned that the Caribbean, particularly TT, should brace for possible economic shocks as Trump's trade and tariff decisions unfold, especially with his transactional approach to foreign policy.

“His rhetoric, particularly on trade and tariffs, is aimed at generating flow of funds to the US,” Dookeran told Newsday in a recent interview.

“It may be tactical, part of a larger negotiation strategy, but the ripple effect will be felt across the region.”

Dookeran, an economist, who also served as finance minister under the People’s Partnership government, pointed out that although Trump's trade moves primarily targeted China, Mexico and Canada, the Caribbean could see some fallout, particularly in light of the US stance on Venezuela.

In recent years, trade between TT and the United States has been heavily influenced by energy exports, with oil and natural gas products making up the bulk of the exchange.

Additionally, the US is one of Trinidad’s top sources of imports, particularly machinery, equipment and chemicals.

Any shifts in US policy – especially regarding tariffs or the energy sector – could put pressure on the TT economy, Dookeran said, adding that rising inflation in the US would lead to higher borrowing costs for Caribbean nations, making them less competitive in the global market.

Dookeran also cautioned that should US policy impact TT's agreements with Venezuela over natural gas, the risks for TT would increase. “The equilibrium in the world economy is jolted,” he noted.

“More pressures on foreign exchange and higher import costs will be inevitable.”

Dookeran said TT could mitigate those risks by adopting a more diversified and strategic approach to its external economic policy.

He suggested that a “multi-align” foreign economic policy, pursued not just within Caricom but on a broader regional basis, would be crucial for adapting to Trump's policies.

This approach, he added, would allow the country to negotiate more effectively with the US while also strengthening ties with other global economic players.

“There is little need to panic or act in haste,” Dookeran said. “The opportunity presented by Trump’s ‘America First’ strategy must be grasped, and captured.

“A non-paper on these delicate issues is an appropriate starting point. Words matter, and the Caribbean must be ready.”