Scarcely a day has passed without a five-alarm tariff fire since President Donald Trump took office last week.
The Commander in Chief has ratcheted up trade tensions with Mexico, Canada, China, Panama, Russia (and the BRICS Alliance), as well as the entire European Union, in a matter of just seven days. But even with this game of tariff roulette as a backdrop, a Sunday afternoon skirmish between Trump and Colombian President Gustavo Petro seemed to come out of left field.
Tensions began to escalate on Friday as the planes full of Latin American migrants took off from U.S. airports—a realization of Trump’s oft-repeated campaign promise to deport undocumented immigrants en masse. But with the military flights en route to Colombia, Petro said the country would refuse to receive the deportees. Trump swiftly took to Truth Social to deliver a directive: take them back or face steep duties and sanctions.
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Colombia would be hit immediately with “emergency” 25-percent tariffs on “all goods coming into the United States,” Trump wrote. In one week, that number would rise to 50 percent. Additionally, Colombian government officials and their contemporaries would face travel bans and visa revocations, and banking and financial sanctions would be imposed.
“These measures are just the beginning,” the president warned. “We will not allow the Colombian Government to violate its legal obligations with regard to the acceptance and return of the Criminals they forced into the United States!”
Petro responded with a strongly-worded missive of his own. “You can try to carry out a coup with your economic strength and your arrogance…But I will die true to my principles,” the leader said, adding that Colombia would respond with its own proportional retaliatory duties on U.S. imports.
Petro’s stand proved short-lived. By Sunday evening, the situation had been diffused. Colombia’s Foreign Minister, Luis Gilberto Murillo, told reporters at a press conference that the U.S. and the South American nation had “overcome the impasse.” Colombia would accede to Trump’s demands to avoid the new duties.
“As you saw yesterday, we’ve made it clear to every country that they will be taking back [their] people, that we’re sending out the criminals, that the illegal aliens coming from their countries were taken back, and they’re going to take them back fast,” Trump said during a lengthy address at a GOP retreat in Florida on Monday. “If they don’t, they’ll pay a very high economic price, and we’re going to immediately install massive tariffs, it will be placed on them and other sanctions. But the tariffs, I told you—most beautiful word in the dictionary.”
Tariffs as leverage
The dustup with Colombia’s government may serve as a window into Trump’s motivations, his propensity to use economic sanctions as political leverage, and a harbinger of what’s to come.
Throughout his campaign, he said that the tariffs would offset income tax cuts and that, in tandem with lowering corporate tax rates, they would drive more industry back to the U.S. and line the country’s coffers. He repeated those promises Monday, saying, “It’s time for the United States to return to the system that made us richer and more powerful than ever before.”
But the message is getting muddled as Trump wields the threat of duties against countries like Mexico, Canada and Colombia for issues beyond the scope of trade policy or even the balancing of a trade deficit. In fact, the U.S. is Colombia’s biggest trading partner, with the 2006 U.S.-Colombia Trade Promotion Agreement supporting a healthy bilateral trade relationship worth $33.8 billion in 2023—and a U.S. trade surplus of $1.6 billion.
The disconnect was evident as the president continued his address on Monday, coming back to Colombia with another threat. “If they don’t make their product in America, then, very simply, they should have to pay a tariff, which will bring in trillions of dollars into our Treasury from countries that never paid us 10 cents.”
Though the president’s original reasoning for the threat had nothing to do with making goods in the U.S., he nonetheless doubled down on his message: “We’re going to protect our people and our businesses, and we’re going to protect our country with tariffs.”
The cost of tariff uncertainty
The erosion of trade relationships will have marked effects at retail—even if tariffs aren’t the ultimate result, experts believe.
“Rapid escalation of tariff threats can very quickly translate into inflation that directly impacts Americans’ day-to-day purchases,” American Apparel and Footwear Association (AAFA) president and CEO Steve Lamar told Sourcing Journal.
“While Colombia is not a top trading partner in the area of clothing and shoe imports (34th and 30th respectively), it is the eighth largest supplier of some particular apparel items such as brassieres. And a huge exporter of other relevant goods this time of year such as fresh-cut flowers for Valentines Day and coffee for our morning grind,” he said.
“Thankfully, a tariff war was averted this time. But the Sunday evening threats, and counter-threats, show that the pathway from coffee to chaos can be swift during these times,” Lamar added. “No country—even a strong nearshoring ally like Colombia—is immune to the possibility that it could quickly be caught up in damaging tariffs.”
Matt Priest, president and CEO of the Footwear Distributors and Retailers of America (FDRA), said he believes Trump “uses economic leverage to get broader geopolitical or policy wins under his belt.”
“We saw that with Colombia—it broke out very quickly, and then was put to bed very quickly, and he frames that as a success,” he explained. “I think that’s part of his design—to create this uncertainty, this disruption, and then land the plane in an area that doesn’t feel as bad as you thought it might be.”
Whatever the reason behind Trump’s tariff threats, they are raising questions for corporations doing business across the globe. “Our members are trying to figure out what’s going to happen next. ‘How do we cost goods? What will be impacted and what won’t be impacted?’ And that’s just an uncomfortable place to be,” Priest said.
However, during Trump’s first term in office, when he first implemented Section 301 duties on China-made goods, “our members might have had a lot more anxiety,” he acknowledged. “Now, I think there’s a lot more wisdom. There’s some resignation to the fact that this is how it’s going to be, and we can’t all jump and flip out and react to every pronouncement.”
Trump’s accessibility is a double-edged sword, the FDRA lead believes. Where President Joe Biden was often shielded from the press by cautious aides, the new president is “more than happy to talk to everybody,” providing a window into a foreign policy strategy that is perpetually evolving. “The challenge there is that he spends a lot of time saying things, and we’re commentating and analyzing, and you can lose the narrative for sure. It gets muddy,” Priest said.
But he does believe the president ultimately “wants to negotiate outcomes—even if you disagree with his reasoning or the utility of jacking up tariffs to accomplish a geopolitical goal.” Priest said he is hopeful about the Monday confirmation of Treasury Secretary Scott Bessent, a former hedge fund manager with significant expertise in the financial markets.
“I hope [the administration] will be more surgical” in the implementation of new duties than they were the first time around, Priest said. “But we’ll have to see how that plays out.”
