President Donald Trump (speaking to the press about how the United States and Guatemala reached an agreement on asylum in the Oval Office of the White House in Washington, D.C., in 2019) set 10% tariffs on Guatemala. In recent years, Guatemala has attracted foreign direct investment from 200 U.S. and other foreign firms, benefiting from the U.S. Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). File Photo by Sarah Silbiger/UPI | License Photo
WASHINGTON — Guatemalan officials and former officials used the Trump administration tariffs to pitch their nation as a desirable place for foreign investment, which could also benefit the United States by curbing migration from the Central American Country.
President Trump set 25% tariffs on Mexico, but only 10% tariffs on Guatemala, which could benefit the Central American country.
“That difference in tariffs could be an important element if the U.S. is considering strengthening the region for its own exports and for strategic motives,” said Lisardo Bolaños, former deputy minister of Investment and Competitiveness in Guatemala’s Ministry of Economy, said Wednesday in a Zoom conversation with the Center for Strategic & International Studies.
Guatemala in recent years has attracted foreign direct investment from 200 U.S. and other foreign firms, benefiting from the U.S. Dominican Republic-Central America Free Trade Agreement (CAFTA-DR).
These investments have reflected companies’ strategies to manufacture closer to the United States to avoid U.S. tariffs. The Guatemalan officials and former officials suggested that their relatively better position with regard to Trump tariffs could spur more investment.
Bolaños noted that the U.S. maintains a goods trade surplus with Guatemala, unlike its trade deficits with Canada and Mexico. In 2024, the surplus with Guatemala reached $4.7 billion, according to the U.S. Trade Representative.
“Guatemala is a key U.S. ally in the region. We have shown decades-long support for U.S. policies in the international arena” said Bolaños.
Increasing investment in Guatemala can also help stabilize Central America and slow migration, a priority for President Donald Trump during his two terms, said Héctor José Marroquín Mora, vice minister of integration and foreign trade for the government of Guatemala.
Guatemalan immigrants are the 10th largest immigrant group, with nearly 1.3 million Guatemalan immigrants living in the United States. Many left their home country seeking better economic opportunities.
Guatemala is one of the countries most reliant on remittances, money migrants send to their home countries, which accounted for nearly 20% of its gross domestic product in 2023. Most of that money was sent by people living in the United States, as per data from the U.S. Department of State.
If investments created more jobs at home, fewer people would immigrate, said Bolaños.
In an economic sense, the country’s proximity to the United States, its young population and cheap and renewable electricity make it appealing for foreign companies seeking to build new supply chains, the Guatemalan officials and experts said.
“You can get to Guatemala by a truck in 29 hours, or via any of our ports in the Atlantic or Pacific Oceans,” said Bolaños.
Moreover, Guatemala is rich in natural resources, affording it clean energy generation. “Over 53% of Guatemala’s energy matrix is renewable, making it an attractive choice for companies focused on sustainability and ESG compliance,” said Marroquín.
Marroquín also highlighted Guatemala’s abundance in human capital. Over 58% of the population is under the age of 30. Each year, Guatemala graduates over 30,000 professionals and technicians, especially in engineering, business and technology.
However, Guatemala still faces significant obstacles to attract foreign investment. One major barrier is the lack of English language proficiency, according to a policy brief by the Center for Strategic & International Studies.
Businesses in Guatemala also face extensive bureaucratic delays, said Christopher Hernandez-Roy, deputy director and senior fellow of the Americas program at CSIS.
It takes about 203 days to open a small business in Guatemala — more than three times longer than in neighboring El Salvador, where it takes just 66 days, according to the 2023 Ibero-American Index of Bureaucracy.
