US, Colombia Avoid Trade War Over Deportations

Reuters’ Phil Stewart and Oliver Griffin reported Monday morning that “the U.S. and Colombia pulled back from the brink of a trade war on Sunday after the White House said the South American nation had agreed to accept military aircraft carrying deported migrants.”

“U.S. President Donald Trump had threatened tariffs and sanctions on Colombia to punish it for earlier refusing to accept military flights carrying deportees as part of his sweeping immigration crackdown,” Stewart and Griffin reported. “But in a statement late on Sunday, the White House said Colombia had agreed to accept the migrants after all and Washington would not impose its threatened penalties. ‘The Government of Colombia has agreed to all of President Trump’s terms, including the unrestricted acceptance of all illegal aliens from Colombia returned from the United States, including on U.S. military aircraft, without limitation or delay,’ it said.”

I was just informed that two repatriation flights from the United States, with a large number of Illegal Criminals, were not allowed to land in Colombia. This order was given by Colombia’s Socialist President Gustavo Petro, who is already very unpopular amongst his people.…

— Donald J. Trump Posts From His Truth Social (@TrumpDailyPosts) January 26, 2025

“Draft orders imposing tariffs and sanctions on Colombia would be ‘held in reserve, and not signed, unless Colombia fails to honor this agreement’, it added,” according to Stewart and Griffin’s reporting. “…Washington’s draft measures, now on hold, include imposing 25% tariffs on all Colombian goods coming into the U.S., which would go up to 50% in one week; a travel ban and visa revocations on Colombian government officials; and emergency treasury, banking and financial sanctions.”

Colombia Had Threatened Retaliatory Tariffs

The Hill’s Elvia Limon reported Sunday, before the situation was diffused, that “Colombian President Gustavo Petro on Sunday ordered an increase of import tariffs on goods from the United States in retaliation to President Trump’s tariffs and sanctions. Petro, in a post on the social platform X, said he ordered the ‘foreign trade minister to raise import tariffs from the U.S. by 25%.'”

“‘American products whose price will rise within the national economy must be replaced by national production, and the government will help in this regard,’ the post continued,” according to Limon’s reporting.

Tariff Threat Serves as Warning to Other Countries

The BBC’s Anthony Zurcher and Ione Wells reported Monday morning that “for his first week in office, the US president had seemed to be prioritising executive action on immigration over trade measures – even if the latter were a key campaign promise. As if to drive that point home, Trump now appears ready to punish nations that he views as not sufficiently supporting America’s new hard-line immigration polices. He is serving a warning to US allies and adversaries alike: If you don’t co-operate with the US, the consequences will be severe.”

“Colombia has backed down from a tariff war, but the tactic poses a test for the new Trump administration,” Zurcher and Wells reported. “If future sanctions lead to higher prices for US consumers, will the American public object? Will they be willing to tolerate some financial pain incurred to advance Trump’s immigration priorities?”

“Even after Colombia acted to defuse the row, it said a dialogue would be maintained to ‘guarantee the dignity of our citizens,'” Zurcher and Wells reported. “But these kinds of tariffs are a test of will – and could still be applied to other nations that do not agree to the US’s demands. From the looks of it, this is just Trump’s opening move.”

What Would Have Been Affected in a Trade War with Colombia?

CNBC’s Jesse Pound reported Sunday that “Colombia is not one of the U.S.′ largest trading partners, but steep tariffs could still impact billions of dollars of economic activity. The Office of the U.S. Trade Representative puts total bilateral trade between the U.S. and Colombia at $53.5 billion annually as of 2022, with the U.S. having a trade surplus of $3.9 billion.”

“According to data compiled by the Observatory of Economic Complexity, or OEC, petroleum is the largest export of Colombia to the U.S., at roughly $6 billion in 2022. Oil is a two-way trade between the countries, as refined petroleum from the U.S. is the biggest export to Columbia,” Pound reported. “The second-largest export from Colombia was coffee, at $1.8 billion, according to OEC. Colombia accounts for about 20% of coffee shipped to the U.S. and is the second-largest source of imports after Brazil, according to the U.S. Department of Agriculture.”

Biofuels consultant Corey Lavinsky wrote on the social media platform X that “the U.S. ethanol industry would suffer a bit from a trade war with Colombia. Ethanol producers sent a record volume of product to Colombia in 2024 to help it satisfy its 10% mandate. Final total for 2024 should be around 130 million gallons.”