Trade tensions escalate between Colombia and Ecuador as tariffs reach 100 percent

Kathmandu. The ongoing trade tensions between South American neighbors Colombia and Ecuador have intensified. A day after Ecuador increased tariffs on Colombian goods, Colombia announced a retaliatory decision to impose customs duties of up to 100 percent on imports from Ecuador.

According to Colombia's Ministry of Commerce, this move is a direct response to Ecuador's decision. On Thursday, Ecuador raised the tariff on Colombian goods from 50 percent to 100 percent. In response, Colombia has implemented a reciprocal tariff level.

A trade dispute has been simmering between the two nations for several months. Ecuadorian President Daniel Noboa has repeatedly accused Colombian President Gustavo Petro of failing to control drug trafficking and illegal mining along their shared border, further straining bilateral relations.

Beyond tariff hikes, diplomatic relations have also been affected. Following Ecuador's decision, Colombia recalled its ambassador to Bogota. Since the beginning of the year, Ecuador has been increasing customs duties in stages, and Colombia has responded with reciprocal measures, with rates climbing from 30 percent to 100 percent.

However, Colombia has signaled partial relief for certain sectors. President Petro stated that a 'zero percent tariff' would be applied to some raw materials essential for industrial production, which may provide relief to domestic industries.

Colombian Minister of Commerce Diana Morales indicated that the situation is becoming critical, noting that diplomatic efforts between the two countries have nearly collapsed. Tensions flared further this week after Petro referred to former Ecuadorian Vice President Jorge Glas as a 'political prisoner'.

Glas served in various governments from 2013 to 2018 and was sentenced to 13 years in prison last year on corruption charges. He has claimed that he is being subjected to inhumane treatment in prison.

The tension has escalated to the point where Colombia has raised the possibility of withdrawing from the Andean Community of Nations (CAN), a regional organization that includes Peru, Bolivia, and Ecuador. However, CAN announced that it is organizing a diplomatic meeting on Friday in an attempt to facilitate dialogue between the two countries.

Economically, both countries are interdependent. Colombia primarily exports electricity, pharmaceuticals, vehicles, cosmetics, and plastic products to Ecuador, while importing vegetable oil, canned tuna, minerals, and metals.

Another complex aspect of the region is drug trafficking. Approximately 70 percent of the cocaine produced in Colombia and Peru is trafficked through Ecuador via Pacific ports, turning the country into a hub for criminal activity.

Once considered peaceful, Ecuador is now affected by conflicts between criminal groups, leading to a significant increase in violence and homicides. In this context, the combination of a trade war and security challenges has placed additional pressure on regional stability.