US, Colombia avoid trade war, but economic risks loom

The New York Times reveals in its recent article that tensions between the US and Colombia recently escalated, sparking fears of a trade war that could have serious economic implications for both nations. 

A brief trade dispute between the US and Colombia flared up, raising concerns over potential price hikes for American imports like coffee, flowers, and raw materials, while also threatening billions in sales for US corn farmers and chemical companies.

Tensions escalated after Colombia refused to accept US military planes carrying deported immigrants, prompting President Trump to announce potential tariffs on all Colombian imports. In retaliation, Colombia's President Gustavo Petro swiftly threatened to impose his own tariffs.

However, both sides appeared to have resolved the issue, with Colombia's foreign ministry agreeing to allow US military planes to deliver deportees under "dignified conditions." Consequently, the threat of tariffs was put on hold, as confirmed by a White House statement.

While the United States is Colombia's primary trading partner, Colombian exports represent a small portion of US imports, although certain products are more vulnerable to potential tariffs than others.

Crude oil stands as the most significant import of the US from Colombia, making up $5.4 billion of the $16 billion total in 2023. However, this figure represents only a small portion of the overall crude oil imports into the US Colombia also accounted for over a third of US nursery stock imports and around 20 per cent of coffee imports, according to the Census Bureau.

While the US economy is far larger than Colombia’s, a trade dispute would still have its repercussions. For example, US petroleum product manufacturers generated approximately $2.5 billion in business with Colombia in 2023. Other major US exports to Colombia included corn ($1.2 billion) and chemicals ($1 billion).

By Naila Huseynova