The presidents of the United States, Donald Trump, and Colombia, Gustavo Petro, engaged in a crossing of statements that raised the tension between the two countries. Petro said he would not accept flights with deportees if his basic rights were not respected. Trump threatened to impose tariffs on Colombia. Petro said he would respond with tariffs on American products. Trump raised the bet and Petro ended up yielding and accepting the airplanes with deported Colombians.
“I can perfectly understand Colombia,” says Holger Görg, director of the Center for the Globalization of the Kiel World Economy (IFW), because “he is very dependent on the United States as a commercial partner.” More than a quarter of Colombian international trade is made with the US, explains. However, Colombia is neither among the twenty main commercial partners of that country. “American tariffs would have a great impact on the Colombian economy,” he says. But not vice versa. Colombia would have all to lose in a commercial war.
Tariffs against international trade rules
The World Trade Organization (WTO), to which both countries are assigned, prohibits imposing discriminatory tariffs against another member except in exceptional cases, such as an important temporary economic imbalance, or one in which national security is at stake. This reason is the one that Trump alleged, although obviously exaggerated. “That is very clear here,” says Görg: the tariffs would go “against WTO standards.”
For Kiel’s international trade expert, “Trump clearly does not care these rules, nor the international commercial order. I think that was already clear during his first mandate and much more now.” The first case in which the WTO conflict resolution procedure was applied was a contentious between Venezuela and the United States in 1995. The panel designated for it ruled in favor of the Caribbean country and Washington complied with the decision. “I think it is also assumed that Trump will not comply with any WTO decision,” says Görg.
Threats have worked
However, the German analyst admits that no rule has been violated, because no tariff has not been introduced. It has only threatened them. And, for him, that is the problem: that it has not been needed. Trump has seen that threats work. They have suffered a couple of messages on social networks so that Colombia turned back. “So we have to be prepared for the fact that this happens again more often and than other countries, such as China, they can also use this resource,” he advances.
But who is going to use this Trump resource? With Mexico, which has also threatened with tariffs? “There would be different, because Mexico is an important commercial partner for the United States,” says Görg. It is, in fact, the main commercial partner of Washington. “And that means that if the US. UU. They impose tariffs on Mexican products, it would have a great impact on the US economy and undoubtedly increase inflation,” he explains.
A commercial war with Mexico?
“This is much more than a ‘commercial war’, these are unilateral measures with respect to the rest of the countries, including the European Union and Latin America and the Caribbean, which modify the international relations that we have lived since 1944” says Enrique Dussel Peters, professor of economics at UNAM. He sees in Trump’s strategy “a scaling of the ‘Security-Shoring’ (Security relocation) “In which” National Security “and not” free trade or multilateralism based on reciprocity from the Bretton Woods agreements. “
Deportations will also have an economic impact
Peters also recalls that “Mexico has received more than four thousand deportees, most Mexicans, but not only, in the first week of Trump’s management.” And he fears that, even having accepted it, it remains to be seen whether or not the United States will impose unilateral tariffs. His colleague at the National Autonomous University of Mexico, Karla Valverde, coordinator of the Postgraduate in Political Science, highlights that these migrants returned, in addition, will stop contributing to the US economy.
She asks not to minimize Trump’s threats, but neither overdimensed them. “You also have to think that the United States should not put tariffs,” he says. And he agrees that Trump “is not only talking to Mexico and Latin America, you have to be very attentive to how different countries react.”
(RML)
