Colombia matches Ecuador tariff boost to 50% as business groups plead for a resolution

Colombia said Friday that it will raise tariffs on most Ecuadorian imports to 50%, matching Ecuador’s increase announced on a day earlier. Diana Morales, Colombia’s Minister of Commerce, Industry and Tourism, described the move as “regrettable” but said her country had no choice but to “respond in kind” to Ecuador’s decision.

President Daniel Noboa defended Ecuador’s move last week to increase tarriffs on Colombia imports to 50%.

The new levies escalate the conflict that began in January and saw bilateral tariffs of 30% imposed at the beginning of February.

Ecuador President Daniel Noboa imposed tariffs on Colombia citing Bogotá’s failure to tackle organized crime on their shared border. He charged Colombia with “maintaining a porous border” that allowed criminals and drug shipments to move into Ecuador with “minimal interference.”

Noboa claimed he had no choice, citing record-setting murder rates in Ecuador’s coastal provinces as well as increased in drug shipments to Ecuadorian ports and coastal communities. “There has been absolute neglect at the border by Colombia and discussions to restore order have failed,” he said. “In fact, Colombia has withdrawn troops from the region, doubling protection costs for Ecuador.”

Colombian President Gustavo Petro defended his country’s efforts to tackle crime, citing the seizure of more than 200 tons of cocaine on the border and his country’s “close” relationship with the Ecuadorian security forces. He denied that Colombian military units had been withdrawn from the border.

After Bogotá suspended electricity exports to Ecuador, Noboa raised the fee of transporting Colombian crude oil through Ecuador’s pipeline network by 900%.

Business interests in both countries are pleading with their governments to resolve the impasse, saying the tariff war is causing millions of dollars in losses. In addition to direct financial loses, national and regional chambers of commerce and transport companies say tariffs are leading to widespread unemployment. “The action of the Ecuadorian government and the Colombian response has been disastrous for thousands of workers, and it is critical that the tariffs be rescinded and that order be returned as soon as possible,” the Ecuador Transport Union said Friday in a statement.

On Thursday, the Ecuador Federation of Exporters (Fedexpor) called on Noboa “to reopen dialogue immediately” with Colombia to resolve the dispute. Ecuador’s weekly exports to its neighbor are valued at $5.25 million while Colombia’s exports to Ecuador amount to almost $7 million.

Javier Díaz Molina, president of Colombia’s National Foreign Trade Association (Analdez Coombia), said the new 50% tariff rate will make trade between the two countries “unfeasible”. He added that the tariffs will harm legal, formal trade between the neighbors, meaning that “the only ones benefiting from these actions are those involved in illegal activities.”