The Colombian government announced on Thursday that it will reciprocate a 30% tariff increase on Colombian exports by Ecuador, and halt all energy sales to its southern neighbor.
Edwin Palma Egea, Colombia’s Minister of Energy, said the tariffs imposed by the Ecuadorian government of Daniel Noboa equated to an act of “economic aggression” and vowed to respond in kind to Ecuador’s arbitrary increase in duty costs.
The escalation in relations between the two governments stems from the Naboa government criticizing the administration of Colombia’s Gustavo Petro for failing to interdict the flow of illicit narcotics from Colombia into Ecuador, and being slow to collaborate with its South American counterparts on anti-crime initiatives to curtail the influence of organized crime networks in South America, which profit from lucrative drug smuggling routes and illicit mining operations in the region.
Authorities in Bogotá contradict the accusations made by Ecuador, noting that the Colombian government actively cooperates on bilateral security arrangements, including joint military and anti-narcotics operations in the region.
Ecuador currently retains a $800+ billion trade deficit with its Colombian partners, slapping tariffs on Colombian goods like electricity, cars, medicine, and sugar products on Wednesday.
Ecuador also exports approximately $780 million in goods to Colombia, making Ecuador more reliant on Colombian goods.
The 30% increase in duty costs on Colombian goods announced by Ecuador is expected to go into effect next month, and while the reciprocal tariffs announced by Colombia are to be placed on unspecified goods, trade leaders and business unions on both sides of the border express discontent over the escalation.
