Sen. William Parkinson attends a session at the Guam Congress Building in Hagåtña on Wednesday, March 26, 2025.
Photo by Frank San Nicolas/The Guam Daily Post
HAGÅTÑA (The Guam Daily Post) — Sen. William Parkinson believes Guam can capitalize on the sweeping tariffs imposed on Thursday by President Donald Trump on dozens of countries.
Parkinson has drafted a bill, the “Guam Tariff Advantage Development Act,” to encourage foreign investors to take advantage of the island’s status under Headnote 3(a) of the U.S. Harmonized Tariff Schedule.
According to the Guam Economic Development Authority website, under Headnote 3(a), “products that are assembled or manufactured in Guam may enter the customs territory of the U.S. free of duty under certain restrictions.”
The provision requires that products must not contain foreign materials valued at more than 70% of the final appraised value of the manufactured article.
It acts as a workaround that essentially allows foreign manufacturers’ products to bypass the tariffs.
Foreign materials can be imported to Guam duty-free, value can be added locally and the manufactured products can be exported duty-free to the United States.
The Headnote 3(a) exemption has been on the books for years, but Parkinson believes that with the sweeping new global tariffs, the timing is right to push the message.
“Recent tariff impositions by the United States on imported goods create economic opportunities for Guam to become a strategic manufacturing and distribution hub, circumventing such tariffs lawfully and competitively,” Parkinson said.
He said the legislation is meant to provide “clear guidance, strong incentives and efficient administrative frameworks to maximize Guam’s tariff advantage effectively and transparently.”
The bill seeks to establish Guam as a primary hub in the Asia-Pacific region for tariff-free importation, manufacturing, assembly and re-exportation to the U.S. and other jurisdictions.
It requires GEDA to establish “Tariff Advantage Zones,” to be developed by the government of Guam with essential infrastructure.
“Enterprises operating within a designated TAZ shall enjoy streamlined customs procedures and dedicated infrastructure support aimed at expediting the importation, assembly, storage and re-exportation processes,” the bill states.
Qualified businesses would also receive a corporate income tax rebate of up to 75% for a period not exceeding 20 years, and a 100% abatement of real property tax for 10 years, according to the bill.
Companies would also be required to hire a workforce composed of at least 60% Guam residents.
“By strategically leveraging these tariff exemptions, Guam can attract new manufacturing enterprises, foster economic diversification, reduce reliance on tourism and federal defense expenditures and create high-quality jobs for residents,” Parkinson’s bill states.
