U.S. and Guatemala Ink Trade Deal to Bolster Western Hemisphere Textile Supply Chains
WASHINGTON — The United States and Guatemala formalized a reciprocal trade agreement on Tuesday, targeting the elimination of bilateral tariffs and expanding preferential access for textile and apparel goods traded under the existing CAFTA-DR framework. The pact, signed by U.S. Trade Representative Jamieson Greer and Guatemala’s Minister of Economy Adriana Gabriela Garcia, is seen as part of a broader push to reshore manufacturing capacity and strengthen economic ties within the Western Hemisphere.
"This agreement is about more than tariffs—it's about building resilient, regional supply chains from the ground up," Greer stated during the signing ceremony. He emphasized the administration's focus on creating "partnerships that bring production closer to home, support high-wage American jobs, and reduce strategic dependencies."
The U.S. textile industry swiftly applauded the move. The National Council of Textile Organizations (NCTO), a key industry body, noted that Guatemala is a pivotal partner within the CAFTA-DR zone, with two-way textile and apparel trade totaling approximately $2 billion. The wider regional network supported by the pact accounts for over $11 billion in annual trade and sustains nearly half a million U.S. manufacturing jobs.
"In an era of global supply chain fragility, this agreement provides much-needed stability and incentives for nearshoring," said Kim Glas, President and CEO of NCTO. "It solidifies a critical alternative to sourcing from China and reinforces a vital industrial ecosystem in our own hemisphere."
The deal follows a similar framework established with El Salvador late last year, signaling a concerted effort by the U.S. to deepen trade integration with Central American nations. Analysts suggest these bilateral adjustments within CAFTA-DR are designed to address specific trade barriers and boost the competitiveness of regional textile production against Asian exporters.
Industry Perspectives:
Marcus Chen, Supply Chain Analyst at Horizon Insights: "This is a pragmatic, incremental step. While it won't overhaul global trade patterns overnight, it lowers costs and simplifies rules for companies already invested in the region. The real test will be whether it attracts new capital and capacity over the next 18 months."
Elena Rodriguez, Small Business Owner (Apparel Manufacturing, North Carolina): "As someone who sources yarns and fabrics, this is welcome news. It makes doing business with reliable partners in Guatemala easier and more predictable. Every bit of cost savings and administrative streamlining helps us compete."
David Park, Former Trade Official & Commentator: "Let's not oversell this. It's a minor tariff tweak within an existing agreement, dressed up as a major victory. It does little to address the core labor and environmental concerns in the region, and the job numbers touted are largely pre-existing. This is political theater for an election year."
Sarah Johnson, Director of the "Make It Here" Advocacy Coalition: "Finally, a policy that actively rewards companies for keeping production close to home! This is exactly the kind of strategic trade action we need—it supports American workers and builds a more secure, ethical supply chain. We urge the administration to pursue more deals like this."
The specific terms of the agreement involve the mutual removal of all remaining reciprocal tariffs on qualifying goods and a commitment to harmonize customs procedures, with implementation expected to begin within the next quarter.