Ecuador-Colombia tariff war underway; Poverty drops in cities, stays high in the campo; Mazar reservoir nears capacity; Air Canada plans flights to Quito

Trade between Ecuador and Colombia became more expensive Sunday as the two countries imposed reciprocal 30% tariffs on imports. In addition, Colombia suspended the sale of electricity to Ecuador.

Last minute negotiations between the two countries failed to produce an agreement before the February 1 deadline although Ecuador Foreign Minister Gabriela Sommerfeld said she continues to talk to her Colombian counterpart Rosa Villavicencio. There have been no meetings between President Daniel Noboa, who was the first to impose the tariffs, and Colombian President Gustavo Petro.

Hundreds of trucks lined up on highways leading to the Ecuador-Colombia border last week to beat the start of tariffs.

A wide range of products are affected by the new charges including mining equipment, medicines, food, cosmetics, automotive parts and agricultural products from Colombia, and rice, palm oil, tuna, cocoa, appliances and other and manufactured goods from Ecuador.

In 2025, Ecuador imported $1.9 billion in goods from Colombia while Colombia purchased $950 million from Ecuador.

Noboa announced Ecuador’s tariffs January 21, claiming that Colombia had been lax in combating crime near the border. He said Colombia had ignored Ecuadorian suggestions for more joint missions. Caught by surprise, Petro said the “situation with drug trafficking and other illegal activity is extremely complicated” and that Colombia was willing to meet “at all levels” with Ecuadorian officials to develop enforcement strategies.

Poverty drops in cities, remains high in the campo
While the poverty rate dropped in Ecuador’s urban areas in the past 12 months it remained high in rural areas, the National Institute of Statistics and Census (INEC) reported on Friday. The rate was 13,8% in cities while it was 37.6% in rural areas and towns with less than 10,000 population. The rate of extreme poverty was 3% in cities and 19.7% in the countryside.

In its annual report, INEC also reported that while cities saw economic growth of 4%, growth was flat in rural areas. “This is a continuation of an economic pattern we have seen since the end of the Covid pandemic,” INEC said. “The disparity between cities and rural districts is partly explained by the lack of adequate access to drinking water, sanitation, quality education, credit and state services in the campo.”

INEC also said that migration from rural areas to the cities appears to be increasing, especially among young people. “Cities such as Quito and Cuenca are experiencing a large influx of rural migrants,” the report said.

Mazar reservoir nears max capacity
Thanks to recent rains, the Mazar reservoir was only one meter from reaching maximum capacity early Sunday. The reservoir powers three hydroelectric plants which generate 38% of Ecuador’s electricity. The Electric Corporation of Ecuador (Celec) said it expects the reservoir to top out Tuesday or Wednesday and begin releasing excess water through its spillways.

The reservoir’s water level had fallen 17 meters from its maximum capacity of 2,153 in early January as a result of a six-week drought, but the trend reversed in mid-January as rains returned.

The status of the Mazar complex is especially important since Colombia ended electricity sales to Ecuador last week. In the last eight months, those sales have accounted for between 3% and 8% of Ecuador’s electric use.

Air Canada will fly to Quito
Air Canada, Canada’s flag carrier, announces the resumption of its nonstop flights to Quito starting in December this year. The operation will include three weekly frequencies between Montreal and Quito, and one weekly frequency between Toronto and Quito.

Air Canada’s return to Quito is the result of sustained efforts by Corporación Quiport, which has held negotiations with the airline over the past several years. Air Canada will launch the flights on December 4 this year, and the seasonal operation will run through the end of March 2027 and possibly beyond based on passenger numbers.

Air Canada will operate the flights with Boeing 787 Dreamliner aircraft, with a capacity of 255 passengers.