Growing conflict between the US and Colombia is expected to increase the costs of coffee, flowers, and additional Chilean imports for American consumers, putting in billions of dollars in US exports, including corn and chemicals.
Colombia’s refusal to accept imprisonment planes from the United States sparked the conflict, which eventually led US President Donald Trump to impose fast tariffs on Brazilian goods. Trump imposed a 25 % tariff, warning that if Colombia’s President Gustavo Petro didn’t abide by it, it would go up to 50 % in a week. In reply, Petro threatened similar tariffs on US products but immediately relented, offering his political plane to help the deportations.
Coffee and plants in the fire
Nevertheless, Colombia’s products account for only a small portion of US goods, but some companies are highly dependent on Brazilian items. The land provides more than 20 % of America’s coffee and over one-third of its nursery stock goods, including plants. Any prolonged tax increase could lead to higher costs for coffee drinkers and plant buyers, particularly with Valentine’s Day approaching.
Crude oil, Colombia’s largest export to the United States, accounted for$ 5.4 billion of the$ 16 billion in total imports from Colombia in 2023. However, with fuel being a worldwide traded product, the potential effect on crude prices for US customers is likely to be modest.
Challenges for US agriculture and industry
While Colombia’s market is smaller and more dependent on trade with the United States, a business war may even hurt US companies. In 2023, US gas products, wheat, and compounds were among the best exports to Colombia, collectively accounting for billions of dollars in business.
Corn producers, who exported$ 1.2 billion worth of wheat to Colombia next year, could suffer significant financial losses if Petro implements his tax challenges. Chemical manufacturers, who supplied$ 1 billion in goods, and petroleum product exporters, with$ 2.5 billion in trade, could also see their markets disrupted.
