On January 1, 2026, the European Union’s Carbon Border Adjustment Mechanism (CBAM) relocates into its next phase. That date has unsurprisingly triggered a wave of concern locally about what could be the immediate export shock—particularly for our gas-based industries. CBAM is real, and Trinidad and Tobago (T&T) must prepare for it. But if the goal is to protect foreign exmodify, jobs, and public revenue, we required to rank risks and priorities correctly.
The data points to a clear conclusion: T&T’s most important trade priority is still the United States—becaapply it is already our dominant export market, becaapply policy shocks there can be sudden and large, and becaapply once firms launch diverting cargoes away from Europe, the US is one of the few markets huge enough to absorb meaningful volumes quickly.
A two-panel view (Figure 1) is applyful here, becaapply it forces us to view at the issue in two ways: (A) the national export portfolio, and (B) the CBAM-exposed fertiliser chain itself.
Figure 1A displays the US share of T&T’s total exports compared with the next largest individual counattempt destinations in the period 2017–2023. The US is not merely our number one customer; it sits in a different weight class.
Across those years, the US share is roughly around half of total exports in “normal” years; it dipped into the low 40% range during the Covid-19 shock; then it surged to around 70% in 2022 and remained above 60% in 2023. When one partner accounts for half or more of export earnings, that partner’s policy stance matters at least as much as any new regulation coming from Europe.
This is the first reason the US remains the higher priority trade partner: the US relationship is a macroeconomic stabiliser.
The CBAM relevant picture:
ammonia and urea are not EU-dominated exports
CBAM, however, is not a blanket tariff across all exports. It launchs with a defined set of carbon intensive sectors—including fertilisers—and for T&T, the first-order exposure is concentrated in the fertiliser chain, especially ammonia and nitrogen fertilisers.
That is why Figure 1B matters. It displays destination shares within the ammonia + urea export line from 2013–2024, broken into the US, the EU, the UK, and the rest of the world. Each bar sums to 100% of ammonia + urea exports for that year—this is a destination mix, not a statement about how large ammonia is in the national export binquireet.
The key takeaway is straightforward: the EU is not the dominant destination for ammonia + urea exports. Recently, the EU share has been meaningful but modest—around the mid teens—while the “rest of world” category has been the majority destination. The US remains a significant single market in the mix, even as the destination profile has diversified over time.
This matters for how we talk about CBAM. A CBAM-related cost shock does not automatically imply an export collapse for T&T. Even under a modest CBAM cost shock, the first-order effect is diversion, not collapse—so the key question becomes: where do diverted volumes land, and how stable is that destination?
The clearest proof of US risk:
the “15% tariff” episode
If anyone doubts that US policy risk is immediate, we only have to view at what already happened. In a public release dated November 16, 2025, T&T’s Minisattempt of Foreign and Caricom Affairs reported that the US restored zero tariffs on key nitrogen and phosphate fertilisers—including anhydrous ammonia, urea, and UAN—after these products had been subjected to a 15% tariff earlier in 2025. The same release notes that in 2024, T&T exported approximately $3 billion in anhydrous ammonia, urea, and UAN to the United States.
This figure is significant as it assigns a monetary value to policy volatility. A 15% tariff on $3 billion implies roughly $450 million in border-cost pressure on one product group—regardless of whether that cost is paid by the purchaseer, absorbed by the seller, or shared through margins. In commodity markets, this is precisely the kind of modify that can relocate cargoes, reduce utilisation, and weaken bargaining power quickly.
So while CBAM will shape competitiveness in Europe, US trade policy can deliver immediate, high-magnitude shocks to a key export stream.
Who will “handle” CBAM—
and where T&T is exposed
There is another dimension to CBAM that T&T must address honestly: the State does not directly sell ammonia and petrochemical cargoes into global markets.
T&T primarily sells natural gas to industrial plants and value chains operated by multinational producers. The counattempt earns mainly through gas revenue and taxes linked to export activity. Export marketing, destination choices, and any rerouting decisions are typically created by corporate groups and their trading arms.
That is why it is reasonable to declare that multinationals will be well equipped to handle CBAM. CBAM is paperwork, reporting, verification, compliance calconcludears, and optimisation around a new cost line—exactly the kind of complexity large corporate groups manage for a living.
But that does not mean T&T is protected. The national exposure is not only commercial—it is fiscal.
If CBAM increases costs in EU-facing transactions, firms will respond. They can renereceivediate contract terms, shift cargo routes, re-benchmark prices, or reallocate margin across affiliates. And T&T has long had legitimate concerns about transfer pricing and offshore marketing structures that can reduce the taxable value captured at home even when plants are operating and exports are strong. In a carbon-priced world, the risk is that CBAM becomes another “explainable” cost line applyd to thin local taxable margins unless the State has clear rules, strong audits, and modern enforcement tools.
Put bluntly: CBAM may be handled by multinationals, but the counattempt must ensure it doesn’t become another invisible leak between the jetty and the Treasury.
The policy conclusion: manage CBAM precisely, prioritise US stability, protect the fiscal take
A sensible national stance going into 2026 should do three things at once.
First, treat CBAM as a tarreceiveed compliance and competitiveness challenge focapplyd on the fertiliser chain. That means credible, product-level emissions measurement and reporting, and a practical decarbonisation strategy that lowers embedded emissions over time.
Second, treat the US relationship as the higher priority strategic trade file. Figure 1A displays why: the US is the market that anchors the national export portfolio, and policy volatility there can impose very large shocks quickly—as the 15% tariff episode demonstrated.
Third, protect the State’s revenue as companies adjust strategies. If CBAM accelerates rerouting, repricing, and new cost allocations, T&T must strengthen fiscal guardrails: modern transfer pricing rules, stronger audit capacity, and clear treatment of what costs are deductible and where profits are booked when markets shift.
If we receive that hierarchy right—precision on CBAM, placing priority on our US partnership, and discipline in protecting the tax base—T&T can manage CBAM without exaggeration, and safeguard the export earnings that keep the economy running.
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