By Patricia Zengerle and Nelson Bocanegra
WASHINGTON/BOGOTA (Reuters) -U.S. President Donald Trump’s threat this week to slap Colombia with tariffs over its drug policy marked a sharp escalation in his feud with a country that has long been one of Washington’s closest Latin American allies.
It was also a rejection of an established idea about countering the narcotics business: that free trade can make legitimate exports more attractive than drug trafficking.
On Sunday, Trump said he would raise tariffs and stop financial aid for Bogota, and Colombia said on Monday it had recalled its ambassador from Washington. Most imports from Colombia to the U.S. currently face a 10% tariff, the baseline level Trump has imposed on many countries.
Trump also called leftist Colombian President Gustavo Petro an “illegal drug leader,” after Petro accused the U.S. of committing “murder” and said the U.S. had fired at a boat off Venezuela that belonged to a “humble family,” not a rebel group.
Tensions between the U.S. and many countries in Latin America have been escalating for weeks, as the American military has sharply increased its military presence in the southern Caribbean and struck vessels in international waters that it alleges to be carrying drugs, without offering evidence.
For decades, the U.S. has pursued a dual strategy to help Colombia fight its powerful drug cartels.
One part of the approach revolved around military and security assistance and the other was trade and economic assistance, including a 1991 trade deal that gave Andean countries duty free access to U.S. markets to create legal alternatives to the drug trade.
Steep import duties and aid cuts would reverse that part of the longstanding policy toward Colombia. Analysts said the measures could eventually increase the drug trafficking the Trump administration has vowed to eradicate.
“Linking President Petro to criminal drug trafficking activities seems to be Trump’s way of legally justifying the tariffs he would seek to impose on Colombia,” said Sergio Guzman of Colombia Risk Analysis in Bogota.
He added that the import duties would be counterproductive because they would target legal businesses that provide the government with essential tax revenue. “These tariffs will have no effect on illegal economies, but they will worsen the legal economy.”
The U.S. is Colombia’s largest trading partner, with about $30 billion in annual trade. The U.S. has a small trade surplus with the South American country.
TARIFFS AS POLICY TOOL
As he has overhauled U.S. relationships across the globe, Trump has wielded tariffs to gain political, as well as economic, influence over foreign governments.
“Trump sees tariffs as a policy tool to create leverage and to pressure foreign states,” said Ken Roberts, a professor of government with a specialization in Latin American politics at Cornell University.
“All of this fits into a pattern of seeing Latin America as a U.S. sphere of influence and the U.S. somehow has a right to intervene,” Roberts said.
Shipments to the U.S. account for 35% of the South American country’s exports, according to the Colombian-American Chamber of Commerce, while 70% of imports from the U.S. are items not produced in Colombia.
Businesses selling products most dependent on the U.S. market, including coffee, flowers, bananas, limes and avocados, as well as livestock farmers and oil producers could be particularly hard-hit, said Jose Ignacio Lopez, who heads the ANIF economic think tank in Bogota.
“In order to combat drug trafficking, Colombia needs the legal revenue from taxes to fund security and the state apparatus,” Lopez said.
Trump and Petro have been at loggerheads since the U.S. president began his second term in the White House in January. That month, Trump threatened to impose steep tariffs after Petro refused to accept military flights carrying deportees as part of the new U.S. administration’s immigration crackdown.
He also revoked Petro’s visa during the U.N. General Assembly last month over the Colombian leader’s comments at a pro-Palestinian demonstration.
Juliana Rubio, associate director of the Americas Program at the Center for Strategic and International Studies in Washington, said Trump’s shift to steep tariffs and cutting off of aid could be disastrous for Colombia’s economy.
“I am watching for whether this tit for tat escalates and whether we actually see policies in place mandating higher tariffs or actually stopping aid … or is it just a hot moment?”
But Rubio said it would send a difficult message to the region, given longstanding close ties between Washington and Bogota.
“I am sure China is happily looking at this and happy to work with Colombia and with other countries in the region to have a better trade deal,” she said.
(Reporting by Patricia Zengerle in Washington and Nelson Bocanegra in Bogota; additional reporting by Sarah Morland in Mexico City; editing by Don Durfee and Paul Simao)
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