Why Trump's Tariff Dispute With Colombia Is Troubling

United States of America and Colombia Merged Flag Together.

(Image credit: Getty Images)

published 30 January 2025

President Donald Trump was on the brink of igniting a trade war with Colombia within his first week in office and it all ended in ten hours.

Trump threatened 25% tariffs on Colombian goods imported to the U.S. on Jan. 26, which would increase to 50% within a week after Colombia’s president denied the arrival of deportation flights from the United States.

That spat occurred as President Gustavo Petro of Colombia blocked two U.S. military planes carrying Colombian migrants from entering the country, calling for the dignified treatment of the people of Colombia.

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The diplomatic dispute came as Brazil’s Ministry of Foreign Affairs demanded explanations from the U.S. government for the “degrading treatment” of deportees after they arrived handcuffed. Petro requested that Colombian migrants be treated respectfully, adding that his government would welcome them on civilian planes.

Trump’s tariff threat soon escalated beyond a simple tax dispute.

The Trump administration issued a series of harsh retaliatory sanctions and penalties, including visa sanctions, a travel ban, and enhanced inspection methods for Colombian citizens entering the U.S.

Petro retaliated with 25% tariffs on U.S. goods entering Colombia, followed by a 50% hike within a week. However, the Colombian government soon yielded and came to an agreement with the U.S. to avert a devastating trade war.

Here’s a summary of what happened, and how it could have impacted your wallet. This story still developing.

What were Trump’s threats to Colombia?

President Trump narrowly avoided slipping into a trade war with Colombia, but will his blunt use of tariff threats cause trouble during his second term?

As the diplomatic dispute over the treatment of Colombian migrants unfolded on Sunday, Trump announced bold measures against Colombia on his platform Truth Social. These included:

Emergency tariffs: Trump threatened emergency 25% tariffs on all Colombian imports to the U.S., which would escalate to 50% within a week.
Travel ban: The U.S. State Department immediately banned travel to the United States and ordered the cancellation of visas for Colombian government officials, allies, or supporters.
Visa sanctions were ordered on all party members, family members, and supporters of the Colombian government.
Enhanced inspections from the U.S. Customs and Border Protection were ordered on all Colombian nationals and cargo.
Financial penalties: The U.S. Treasury would carry out banking and financial sanctions under the International Emergency Economic Powers Act (IEEPA).

As mentioned, Colombian President Petro retaliated by threatening a 25% tariff on all U.S. goods imported to Colombia, followed by a 50% tariff after a week. Soon after, both parties reached an agreement.

What was the agreement?

White House press secretary Karoline Leavitt said that Trump’s tariff orders and sanctions would be “held in reserve and not signed” on Jan. 26, as long as Colombian migrants returned to their country. However, visa restrictions on Colombian officials and enhanced inspections would remain in place until Colombian deportees were returned.

Colombia's government asked that migrants be treated with dignity and respect.

Trump’s tariff threat sparked fears of higher gas, coffee prices

One of the largest category of imports from Colombia include crude oil, followed by coffee, and cut flowers, according to the latest data from the Observatory of Economic Complexity.

Crude petroleum imports accounted for $6.05 billion
Coffee imports totaled $1.78 billion
Cut flowers comprised of $1.64 billion

Colombia is the second largest supplier of coffee after Brazil, the U.S. Department of Agriculture reported, responsible for 20% of all imports in 2024. The Associated Press reported that Colombia is the sixth-largest exporter of crude oil to the U.S.

The prices of said products would have been on the rise if Trump hadn’t gotten his way, worsening what may soon come.

Separately, the Trump administration is also considering levying 25% tariffs on Canada and Mexico as soon as Feb. 1, 2025. China would also be hit with a 10% tariff. As reported by Kiplinger, the measure will have a broad impact on your wallet.

The price of imported goods from those countries will affect the prices of cars, food, and vegetables, as well as gasoline.

Migrant flights land in Colombia

As part of the resolution between the Trump administration and the Colombian government, the migrants who had been blocked from entering Colombia on U.S. military planes were transported to two Colombian Air Force planes and delivered to Bogotá.

The two aircraft landed on January 28 and reportedly included a total of 201 Colombian citizens, 110 sent from California and 90 from Texas.

Colombian Foreign Minister Luis Gilberto Murillo said that the country would continue to welcome Colombian deportees in “dignified conditions,” the BBC reported.

U.S. officials said that visa restrictions would not be lifted until the migrants who had been turned back on Sunday landed in Colombia. However, the temporary visa restrictions appear to be still in place to date per the U.S. Embassy in Colombia website.

Bottom line: defining the role of tariffs under Trump

Tariffs along with other extraordinary restrictions may have yielded results for the Trump administration this time, but the president’s reliance on tariffs may have negative implications for the U.S. economy in the long-term.

Trump is currently considering a 25% tariff on Mexico and Canada imports to the U.S. As mentioned, tariffs are paid by domestic businesses in the United States, and the additional cost is generally passed on to U.S. consumers.

That means prices of everyday goods such as groceries, electronics, clothes, and gas can be on the rise. Though potential tariffs on Colombia are apparently on hold for now, other sanctions are still in place.

Stay tuned as any changes may impact you directly.

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Gabriella Cruz-Martínez is a seasoned finance journalist with 8 years of experience covering consumer debt, economic policy, and tax. Before joining Kiplinger as a tax writer, her in-depth reporting and analysis were featured in Yahoo Finance. She contributed to national dialogues on fiscal responsibility, market trends and economic reforms involving family tax credits, housing accessibility, banking regulations, student loan debt, and inflation.

Gabriella’s work has also appeared in Money Magazine, The Hyde Park Herald, and the Journal Gazette & Times-Courier. As a reporter and journalist, she enjoys writing stories that empower people from diverse backgrounds about their finances no matter their stage in life.