Guatemala, the largest economy in Central America, is a significant trading nation with open trade policies designed to foster economic development and protect domestic industries. As a member of the World Trade Organization (WTO), Guatemala aligns its tariff system with international standards. Its import tariff rates are structured to support local industries while ensuring the availability of essential goods at competitive prices. Additionally, Guatemala benefits from various Free Trade Agreements (FTAs) that grant preferential tariff rates for certain countries, contributing to the diversification of trade and boosting economic relations.
Custom Tariff Structure in Guatemala
General Tariff Policy in Guatemala
Guatemala’s customs regime is governed by the Central American Tariff System (SAC – Sistema Arancelario Centroamericano), which harmonizes tariffs among Central American countries. Tariff rates in Guatemala are set to achieve the following goals:
- Revenue generation: Import tariffs are an essential source of government revenue.
- Protection of local industries: Higher tariffs are applied to goods that compete with locally produced products, particularly in agriculture and manufacturing.
- Encouragement of investment: Low tariffs are generally applied to capital goods and inputs necessary for local production, fostering industrial development.
- Regional trade integration: As a member of the Central American Common Market (CACM), Guatemala applies uniform tariffs for most products traded within Central America.
The Guatemalan tariff system follows the Harmonized System (HS) of classification, which assigns tariff rates based on the category of the product. Tariffs range from 0% to 40%, with most goods falling between 0% and 15%.
Preferential Tariff Agreements
Guatemala’s trade policy benefits from several Free Trade Agreements (FTAs) that reduce or eliminate tariffs on specific goods imported from partner countries. The most important agreements include:
- Central American Free Trade Agreement (CAFTA-DR): This agreement between the United States, Central American countries, and the Dominican Republic significantly reduces tariffs on goods traded between member nations.
- Association Agreement with the European Union (EU): Guatemala enjoys preferential tariffs on a wide range of products traded with the EU.
- Mexico-Guatemala Free Trade Agreement: This bilateral agreement provides reduced tariffs on goods traded between Mexico and Guatemala.
- Central American Common Market (CACM): Guatemala is part of this regional trade bloc, which allows for duty-free movement of goods between member countries, including El Salvador, Honduras, Nicaragua, and Costa Rica.
Special Import Duties and Restrictions
In addition to standard tariffs, Guatemala may impose special import duties on certain products to protect domestic industries or address trade imbalances. These include:
- Antidumping duties: Applied to products imported at below-market prices to prevent unfair competition with local producers.
- Excise duties: Certain goods, such as alcohol, tobacco, and petroleum products, are subject to excise taxes in addition to import tariffs.
- Environmental levies: Products that have a negative impact on the environment, such as plastics and hazardous materials, may face additional taxes or restrictions.
Product Categories and Corresponding Tariff Rates
Agricultural Products
1. Dairy Products
Guatemala imports a significant amount of dairy products, particularly cheese, milk powder, and butter, due to limited domestic production.
- General tariff: Dairy products such as milk, butter, and cheese are typically subject to tariffs of 15% to 20%.
- Preferential tariffs: Reduced tariffs apply to dairy imports from the United States under CAFTA-DR and from the European Union under the Association Agreement.
- Special duties: Antidumping duties may be applied to dairy products from countries where unfair pricing practices or subsidies create market distortions.
2. Meat and Poultry
The meat and poultry sector is vital for both domestic consumption and imports, with Guatemala relying on imports to meet demand.
- General tariff: Meat products, including beef, pork, and poultry, face tariffs ranging from 10% to 25%. Fresh meat typically faces lower tariffs than processed meats.
- Preferential tariffs: Under CAFTA-DR, meat imports from the United States benefit from reduced or zero tariffs for certain products, with a phase-out period for remaining tariffs.
- Special duties: Import quotas may be applied to specific meat products, particularly frozen poultry, to protect local producers. Imports exceeding the quota face higher tariffs.
3. Fruits and Vegetables
Guatemala is a major producer of fruits and vegetables, but it also imports a variety of these products to meet domestic demand, especially for exotic or out-of-season produce.
- General tariff: Fresh fruits and vegetables typically face tariffs of between 0% and 15%, depending on the product.
- Preferential tariffs: Reduced tariffs apply to imports from countries within the Central American Common Market (CACM) and from the United States under CAFTA-DR.
- Special duties: Seasonal tariffs may be applied to protect local farmers during the harvest season for specific fruits and vegetables, such as tomatoes or onions.
Industrial Goods
1. Automobiles and Auto Parts
Automobiles and auto parts are significant import categories for Guatemala, with tariffs designed to regulate the market and encourage the development of local assembly and manufacturing.
- General tariff: Imported vehicles are subject to tariffs ranging from 5% to 20%, depending on the type and age of the vehicle. Auto parts face tariffs of 5% to 15%.
- Preferential tariffs: Vehicles and auto parts from the United States and Mexico benefit from reduced or zero tariffs under CAFTA-DR and the Mexico-Guatemala Free Trade Agreement.
- Special duties: Additional excise duties may apply to luxury vehicles and vehicles with large engines. Environmental levies may be imposed on high-emission vehicles to promote energy efficiency.
2. Electronics and Consumer Goods
Consumer electronics such as smartphones, computers, and home appliances are in high demand in Guatemala, with moderate tariffs applied to these imports.
- General tariff: Electronics generally face tariffs of between 5% and 15%, depending on the product category.
- Preferential tariffs: Under CAFTA-DR and the Association Agreement with the EU, electronics imported from the United States and the EU benefit from reduced tariffs or duty-free access.
- Special duties: Certain electronics, particularly those with high energy consumption or hazardous materials, may face environmental taxes or additional restrictions.
Textiles and Clothing
1. Apparel
Guatemala imports a significant amount of apparel, although it also has a growing textile and clothing manufacturing industry. Tariffs on imported clothing are structured to protect domestic producers while allowing access to affordable clothing for consumers.
- General tariff: Apparel imports face tariffs ranging from 10% to 25%, with higher rates applied to finished garments.
- Preferential tariffs: Under CAFTA-DR and the Association Agreement with the EU, apparel imports from the United States and the EU benefit from reduced tariffs or duty-free access.
- Special duties: Antidumping duties may be applied to clothing imports from countries where market-distorting practices, such as low-cost production or dumping, are detected.
2. Footwear
Footwear imports play an important role in the Guatemalan retail sector, and tariffs are applied to protect local manufacturers while ensuring access to affordable products.
- General tariff: Footwear is subject to tariffs ranging from 10% to 20%, depending on the type and material of the shoe.
- Preferential tariffs: Reduced tariffs or duty-free access applies to footwear imported from the United States under CAFTA-DR and the EU under the Association Agreement.
- Special duties: Antidumping duties may be imposed on low-cost footwear from countries involved in unfair trade practices, such as dumping or underpricing.
Raw Materials and Chemicals
1. Metal Products
Metal products are essential for Guatemala’s construction and manufacturing industries. These imports face tariffs based on their classification and end use.
- General tariff: Metal products, such as steel, aluminum, and copper, face tariffs ranging from 5% to 15%.
- Preferential tariffs: Reduced tariffs apply to metal imports from CAFTA-DR countries and the European Union under the Association Agreement.
- Special duties: Antidumping duties may be applied to metal imports from countries such as China or India where subsidized production or market distortion occurs.
2. Chemical Products
Guatemala imports a wide range of chemicals for industrial, agricultural, and pharmaceutical purposes. Tariffs on chemical imports vary depending on the product’s classification.
- General tariff: Chemical products face tariffs of between 5% and 15%, with lower rates applied to essential chemicals used in manufacturing and agriculture.
- Preferential tariffs: Reduced tariffs or duty-free access applies to chemicals imported from the United States under CAFTA-DR and from the EU under the Association Agreement.
- Special duties: Hazardous chemicals may face additional restrictions or duties based on environmental and public health concerns.
Machinery and Equipment
1. Industrial Machinery
Industrial machinery is crucial for Guatemala’s growing manufacturing and agricultural sectors. To promote industrialization, tariffs on machinery are generally low.
- General tariff: Industrial machinery imports face tariffs of 0% to 10%, depending on the type of machinery and its intended use.
- Preferential tariffs: Under CAFTA-DR and the Association Agreement with the EU, machinery imported from the United States and the EU often benefits from reduced tariffs or duty-free access.
- Special duties: Additional duties may apply to machinery imports from countries where unfair trade practices or market distortions are identified.
2. Medical Equipment
Medical equipment is vital for Guatemala’s healthcare sector, and tariffs on these goods are kept low to ensure access to affordable healthcare supplies.
- General tariff: Medical equipment, such as diagnostic tools, hospital supplies, and surgical instruments, typically faces tariffs of between 0% and 10%.
- Preferential tariffs: Reduced tariffs or duty-free access applies to medical equipment imported from the United States under CAFTA-DR and from the EU under the Association Agreement.
- Special duties: In times of health emergencies, such as the COVID-19 pandemic, Guatemala may waive tariffs on critical medical supplies to ensure availability.
Special Import Duties Based on Country of Origin
Import Duties on Products from Specific Countries
Guatemala may impose special duties or restrictions on imports from certain countries, particularly in cases of unfair trade practices, such as dumping or subsidies.
- China: Guatemala may impose antidumping duties on specific products from China, particularly in sectors such as textiles, steel, and electronics, where unfair pricing practices or subsidies are detected.
- United States and European Union: Under CAFTA-DR and the Association Agreement, most imports from the United States and the EU benefit from reduced tariffs or duty-free access. However, specific products may face restrictions or higher duties if they threaten local industries.
- Central American Countries: Goods originating from CACM member countries generally enter Guatemala duty-free, provided they meet the rules of origin.
Tariff Preferences for Developing Countries
Guatemala grants preferential tariff treatment to imports from certain developing countries under global trade agreements. Under the Generalized System of Preferences (GSP), Guatemala enjoys reduced or zero tariffs on specific products imported from developing countries, particularly for agricultural goods, textiles, and raw materials.
Essential Country Facts About Guatemala
- Formal Name: Republic of Guatemala
- Capital City: Guatemala City
- Largest Cities:
- Guatemala City
- Mixco
- Villa Nueva
- Per Capita Income: USD 4,800 (as of 2023)
- Population: Approximately 18 million
- Official Language: Spanish
- Currency: Guatemalan Quetzal (GTQ)
- Location: Located in Central America, bordered by Mexico to the north and west, Belize to the northeast, Honduras to the east, El Salvador to the southeast, and the Pacific Ocean to the south.
Geography, Economy, and Major Industries of Guatemala
Geography of Guatemala
Guatemala is a Central American country with a diverse landscape that includes volcanic mountains, tropical rainforests, and coastal plains. The country is known for its rich biodiversity and fertile lands, which support agriculture, one of the key sectors of its economy. Guatemala’s climate varies significantly depending on altitude, ranging from tropical conditions along the coasts to temperate climates in the highlands.
Economy of Guatemala
Guatemala has the largest economy in Central America, characterized by a diverse range of industries. Agriculture plays a central role in the economy, with major exports including coffee, sugar, bananas, and vegetables. The country also has a growing industrial base, particularly in manufacturing, textiles, and processed foods.
In recent years, Guatemala has focused on diversifying its economy by promoting investment in key sectors such as tourism, energy, and information technology. The government has implemented policies aimed at improving the business environment, including streamlining customs procedures and reducing tariffs on capital goods and raw materials.
Major Industries in Guatemala
1. Agriculture
Agriculture remains a cornerstone of Guatemala’s economy, employing a significant portion of the population. Key agricultural products include coffee, bananas, sugar, and vegetables. Guatemala is one of the world’s top exporters of coffee and bananas, and the agricultural sector remains a key contributor to foreign exchange earnings.
2. Manufacturing
The manufacturing sector is expanding, with industries such as food processing, textiles, and plastics playing an important role in the country’s export economy. Guatemala is a major exporter of textiles and garments to the United States under CAFTA-DR.
3. Mining
Mining is an important sector in Guatemala, particularly the extraction of precious metals such as gold and silver. The country also has significant deposits of other minerals, including nickel and zinc, which contribute to export revenues.
4. Tourism
Tourism is a growing industry in Guatemala, with attractions including ancient Mayan ruins, such as Tikal, and the scenic beauty of Lake Atitlán. The country’s cultural heritage, natural landscapes, and colonial cities make it a popular destination for international tourists.
5. Energy
Guatemala is working to diversify its energy sources, with a focus on renewable energy such as hydropower and geothermal energy. The country’s abundant natural resources make it well-positioned to develop its renewable energy sector, contributing to both domestic consumption and exports to neighboring countries.
