What Trump's Sanction and Tariff Threats Mean For Colombia

(ANDREA ARIZA/AFP via Getty Images)

Colombian Foreign Relations Minister Luis Gilberto Murillo (C) looks on with other Colombian officials during a Jan. 26 press conference on a diplomatic dispute with the United States at the San Carlos Palace in Bogota, Colombia.

The U.S. threat of tariffs and sanctions on Colombia because of a dispute over migrants offers a precedent for future White House threats against countries in Latin America and other parts of the world over issues not necessarily connected to migration, and will push Colombia to seek deeper ties with China. The United States and Colombia avoided a trade war late Jan. 26 after Colombia's government said it had agreed to accept deported migrants from the United States. Only a few hours before this agreement, U.S. President Donald Trump had announced tariffs and sanctions on Colombia and visa restrictions and travel bans on officials and allies of the government after Colombian President Gustavo Petro revoked landing authorization for two U.S. deportation flights en route to Colombia. Petro wrote on social media early Jan. 26 that his administration would not accept flights with deported migrants from the United States without a protocol that treats deportees with "dignity." Colombia's president also noted that Bogota would receive Colombian nationals in civilian airplanes only so long as U.S. authorities do not treat them like criminals. Trump's threats included banking and financial sanctions and those imposed by the U.S. Treasury under the International Emergency Economic Powers Act. According to Trump, immediate 25% tariffs on all Colombian goods exported to the U.S. would be raised to 50% in one week. The Republican also announced a travel ban and immediate visa revocations on Colombian government officials, allies and supporters and visa sanctions on party and family members and government supporters. Trump also directed stricter customs inspections on all Colombians entering the United States and the closure of visa operations at the U.S. Embassy in Bogota. In reaction, Petro announced retaliatory 25% tariffs on U.S. goods while his administration said its presidential aircraft would be available to ensure the return of Colombian nationals "with dignity." Late Jan. 26, the White House reversed course and stated that the United States would not impose punitive tariffs on Colombia after Bogota agreed to all of Trump's terms, including receiving deportation flights from the U.S.

Within his first week in office, Trump initiated an aggressive immigration crackdown, including executive orders declaring a national emergency at the U.S.-Mexico border, deploying armed forces, overhauling asylum processes and expediting mass deportations. On Jan. 23, Immigration and Customs Enforcement reported more than 1,000 deportations, with military aircraft used to repatriate more than 5,000 detainees from Texas. On Jan. 24, U.S. planes deported migrants to Brazil, Guatemala and Honduras.
Between 2020 and 2024, Colombia accepted 475 deportation flights from the United States, the fifth largest number in Latin America behind Guatemala, Honduras, Mexico and El Salvador, advocacy group according to Witness at the Border.
The pace of deportations in Trump's first days in office suggests an increase in repatriations compared to the Biden administration, which carried out 1.5 million deportations between 2020 and 2024, according to the Migration Policy Institute. The figure is similar to the one recorded under Trump's first term but lower than the 2.9 million deportations former President Barack Obama carried out during his first term (between 2008 and 2011).
The United States is Colombia's largest trading partner, and the countries have a free trade agreement. Bogota is one of the top five recipients of U.S. foreign aid and support worldwide. Colombia's exports to the U.S. reached $13 billion in 2024, an 8% year-over-year increase, with the main products being oil, coffee, flowers and gold. In 2023, Colombia recorded a $1.8 billion trade deficit with the United States.

Trump's threats of banking, financial and IEEPA sanctions represented the greatest potential threat to Colombia. If implemented, they could have led to limits on trade or investment in some economic sectors (such as energy or mining), on goods (from military equipment to edge technology, such as microchips) and on services (especially financial products). The sanctions could have triggered a currency and financial crisis in Colombia, limiting the country's ability to import cereals, refined oil, pharmaceutical and other chemicals and equipment and machinery required to maintain or modernize its industry. Financial sanctions could also have targeted entities or individuals linked to the government to virtually cut Colombia's access to the international financial system. In the worst-case scenario, they could have made it illegal for U.S. companies and some from other Western nations to invest in Colombia, while making it virtually impossible for multinationals to repatriate profits or import Colombian oil or minerals, for instance. The vast scope of possibilities gave the Trump administration the upper hand regarding the debate over Colombian compliance with Washington's demands. Just as Trump announced an initially lower 25% tariff that would jump to 50% levies within a week, any actual sanctions would likely have started out limited before being expanded, allowing White House to ratchet up the pressure on Bogota. Tariffs would have reduced the competitiveness of Colombian exports to the United States, likely disrupting global supply chains that rely on the country's energy or agricultural commodities. Enhanced U.S. customs inspections of all Colombian nationals and cargo would have significantly disrupted business travels for the country’s citizens and caused operational delays, perhaps even causing buyers to stop purchasing perishable items, such as flowers.

While a trade war was avoided, Trump's aggressive approach will fuel heightened uncertainty among businesses not only in Colombia but also in countries that may get involved in disputes with the White House over the next four years. Despite the last-minute agreement with Colombia, the United States will likely use the incident as an example for the rest of the region to win Latin American governments' cooperation with White House's migration policy. Should Trump replicate this approach to other Latin American countries that refuse to accept deported migrants from the U.S., companies in or doing business with these countries would face similarly heightened uncertainty and operational risks from threats or the actual impositions of tariffs or sanctions. Before the incident with Bogota, the governments of Brazil, Colombia and Mexico were seeking a coordinated response to Trump's migration policy toward the region while the Community of Latin American and Caribbean States called an emergency meeting for Jan. 30 on the same matter. The likely U.S. dispute with Panama over the country's canal probably would involve a similar U.S. negotiation strategy, with Trump threatening President Raul Mulino to lower fares for ship crossings and adopt measures to curb Chinese presence near the waterway, among other things. The threats against Colombia also create a potential precedent for U.S. action against other countries around the world that refuse to cooperate with the White House over issues beyond immigration. That includes nations with which the United States has large trade deficits and no free trade agreement, such as Germany, Japan, Vietnam and especially China. These nations, and companies from or operating there, will likely face uncertainty stemming from occasional threats from Trump throughout his term, potentially harming their business environment and causing them to postpone investment decisions until a definitive agreement with the United States has been reached and a full-blown crisis or trade war has been averted.

The dispute with the United States will result in Colombia strengthening ties with China and other trade partners, which could include an accelerated accession to the Belt and Road Initiative or BRICS+. Had U.S. sanctions and tariffs been imposed, they would have devastated Colombia's economy due to its close U.S. trade ties and broader investment restrictions. This scenario would have worsened Colombia's fiscal challenges, including a $12 billion peso ($2.87 million) budget deficit for 2025, forcing austerity measures such as cutting food cash transfers, student credit subsidies and stipends for ex-guerrillas from the 2016 peace deal. A worsening economic outlook would have worsened the state of Petro's so-called Total Peace plan, while social and economic pressures would likely have pushed his approval rating — already at 39.9% in December — further down. Even if Colombia and the United States eventually reached a deal, this episode will convince Colombia to reduce its exposure to the United States. One way of doing this is boosting economic ties with China. Bogota will likely strengthen ties with Beijing and potentially seek a streamlined accession to the Belt and Road Initiative. (Colombian membership in BRICS+ was first announced in October 2024.) Other alternatives Petro will likely consider include becoming a member of the BRICS+ or increasing trade with the European Union or non-Western powers, like Russia. While increased commerce with or investments from Beijing, Brussels or Moscow may reduce the negative impacts from eventual future disputes with Washington, they will not be enough to offset the decrease in exports and investments and the likely recession that would ensue should the United States impose punitive measures. Moreover, polls show that most Colombians prefer alignment with Washington than with Beijing, and Petro's pursuing closer ties with China may fuel anti-government demonstrations in coming months, especially as opposition parties will likely intensify their efforts to position themselves ahead of the 2026 presidential dispute. Petro himself will likely call occasional pro-government demonstrations in the coming weeks and months to show he retains political capital, increasing the risks of clashes and unrest.

Petro's austerity plan, outlined before Trump's threats, called for reduced government advertisement expenses, reviewing existing contracts and establishing new rules for hiring service providers, and reducing public servants' overtime payments. Petro also suspended his trip to the World Economic Forum in Davos, Switzerland, to save government funds.