Escalating tensions between the United States and Colombia threaten to raise the prices of coffee, flowers, and other Colombian imports for American consumers while jeopardising billions of dollars in US exports, including corn and chemicals.
The dispute erupted after Colombia refused to accept deportation flights from the United States, prompting US President Donald Trump to announce immediate tariffs on Colombian imports. Trump imposed a 25% tariff, warning that it would increase to 50% within a week if Colombian President Gustavo Petro did not comply. In response, Petro threatened equivalent tariffs on US goods but quickly relented, offering his presidential plane to facilitate the deportations.
Coffee and flowers in the crossfire
Colombia’s products make up a small portion of US imports overall, but certain industries are heavily reliant on Colombian goods. The country provides more than 20% of America’s coffee and over one-third of its nursery stock imports, including flowers. Any sustained tariff escalation could lead to higher prices for coffee drinkers and flower buyers, especially 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 oil being a globally traded commodity, the potential impact on crude prices for US consumers is likely to be minimal.
Risks for US agriculture and industry
While Colombia’s economy is smaller and more dependent on trade with the United States, a trade war could also harm US industries. In 2023, US petroleum products, corn, and chemicals were among the top exports to Colombia, collectively accounting for billions of dollars in trade.
Corn growers, who exported $1.2 billion worth of corn to Colombia last year, could face significant financial losses if Petro were to follow through on his tariff threats. Chemical manufacturers, who supplied $1 billion in goods, and petroleum product exporters, with $2.5 billion in trade, could also see their markets disrupted.