Trade War Heats Up: Colombia Plans Retaliatory Tariffs Against Ecuador

Colombia's commerce minister announced plans to increase tariffs on Ecuadorean products to 50% in response to Ecuador's similar move against Colombian imports. The escalating trade dispute stems from disagreements over border security and drug trafficking cooperation between the South American neighbors.

A brewing trade dispute between two South American nations intensified Friday when Colombia’s commerce minister announced plans to significantly raise import duties on products from Ecuador.

Diana Marcela Morales, Colombia’s commerce minister, revealed during a Friday interview that she intends to recommend boosting tariffs on specific Ecuadorean imports from the existing 30% rate to 50%. This announcement comes as retaliation for Ecuador’s decision to implement identical tariff increases on Colombian products starting March 1.

Ecuador justified its tariff hike by claiming Colombia has not adequately collaborated in fighting drug trafficking activities along their mutual border – an accusation that Colombian officials reject.

“We are going to present the proposal not only to raise tariffs on the 73 tariff subheadings, but also to consider other products that could generate some degree of sensitivity due to the measures Ecuador has taken today,” Morales explained during her radio interview with Blu Radio. She noted the proposal requires approval from a government committee and confirmed “It would be 50% for the 73 subheadings that currently have a 30% rate.”

Ecuadorean President Daniel Noboa reinforced his country’s position Friday, maintaining that Colombia has neglected its border security responsibilities in areas known for cocaine smuggling and other illegal trade.

“This surcharge is the result of an absolute lack of oversight at the border on Colombia’s part; even the army has been withdrawn several hundred kilometers away, which doubles our cost of protecting our border, to nearly an additional $400 million a year,” Noboa stated during an interview with Radio Centro de Quito. He also reported that Ecuador has already collected $13 million from the tariff implementation, which was initially announced in January, and claimed violence in border regions has decreased.

The Ecuadorean leader noted his country faces a $1.1 billion trade deficit with Colombia.

The trade tensions escalated further after Ecuador dramatically increased fees on Colombian oil shipments through its SOTE pipeline system by 900%, bringing the cost to $30 per barrel. This action prompted Colombia to completely suspend its oil shipments through the pipeline.