Trump calls off Colombian tariffs, but global trade threats loom large
Sunday scaries… On Sunday afternoon, President Trump threatened Colombia with 25% tariffs after the country refused to accept two US military planes carrying deported migrants. But by Sunday night the White House said Colombia had agreed to repatriate the passengers. The Trump admin said it would keep tariffs on the table in case Colombia didn’t follow through. Yesterday, Colombia said it was sending one of its air force planes to pick up citizens who were on a Sunday deportation flight that wasn’t allowed to land. The uncertainty rattled traders.
Pressed: Coffee futures hit an all-time high yesterday (the US gets nearly a third of its java from Colombia).
Drip: Following Colombia’s ordeal, China said it was ready to accept any undocumented Chinese nationals returned by the US.
Made in America… or else. On the campaign trail, Trump threatened exorbitant tariffs on top trade partners like Mexico, Canada, and China, but has so far not imposed any. POTUS recently ordered federal agencies to conduct a study of trade practices ahead of potential tariffs, leading some to believe his stance may not be aggressive as previously thought.
Still: Last week Trump said the US could start slapping tariffs on goods from Mexico, Canada, and China as early as next month.
Plus: During his recent speech at the World Economic Forum in Davos, Trump re-upped tariff threats on all US imports while calling EU trade policies “unfair.”
The proof isn’t always in the pudding… Just the threat of tariffs is getting countries to advance the new POTUS’s agenda. But leveraging countries’ dependence on US trade could backfire. If and when Trump actually goes through with tariffs, it could spark a trade war as countries retaliate with their own restrictions.