The U.S. has announced an agreement on trade with Guatemala that builds on their longstanding economic relationship, including under the CAFTA-DR free trade agreement.
As part of this agreement the U.S. will (1) remove its “reciprocal” tariffs on certain qualifying goods from Guatemala that cannot be grown, mined, or naturally produced in the U.S. in sufficient quantities, (2) remove its reciprocal tariffs from, and provide preferential treatment to, certain products, such as textiles and apparel, qualifying under CAFTA-DR, and (3) cap reciprocal tariffs on all other imports from Guatemala at ten percent.
However, the agreement allows the U.S. to terminate it and reimpose the previous reciprocal tariff rate if Guatemala enters into a new bilateral free trade agreement or preferential economic agreement with a non-market country.
For its part, Guatemala has agreed to take the following measures.
- streamline regulatory requirements and approvals for U.S. exports; e.g., accepting vehicles and automotive parts built to U.S. motor vehicle safety and emissions standards, accepting Food and Drug Administration certificates and prior marketing authorizations for medical devices and pharmaceuticals, and accepting electronic certificates, streamlining certificate of free sale requirements, removing apostille requirements, and expediting product registration requirements for U.S. products
- address and prevent barriers to U.S. agricultural products, including with regard to fumigation requirements, facility registration, product registration, and acceptance of currently-agreed certificates issued by U.S. regulatory authorities
- maintain or implement technology solutions that allow for full pre-arrival processing, paperless trade, and digitized procedures for the movement of U.S. goods across its borders
- continue to advance trade facilitating measures, including with respect to express delivery shipments
- publish and conduct public consultations on regulatory measures
- enhance intellectual property protection and prioritize enforcement against IP theft, including moving forward with a number of international IP treaties
- prevent barriers to services and digital trade with the U.S. and refrain from imposing discriminatory digital services taxes
- prohibit the importation of goods produced by forced or compulsory labor
- take measures to improve forest sector governance and combat illegal logging
- strengthen economic and national security cooperation with the U.S. on supply chain resilience, duty evasion, government procurement, investment security, and export controls
- address potential distortionary actions that state-owned enterprises or industrial subsidies may have on the bilateral trading relationship
The agreement will enter into force 30 days after the two parties notify each other in writing that they have completed their respective applicable legal procedures, or on another date that they may decide. However, it is not clear if this is also when the tariff changes will take effect.
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