The beginning of 2025 has been marked by an event being globally analyzed, especially in Latin America, due to the potential regional impact, the start of a new administration in the United States under the slogan "Make America Great Again 2.0." This government proposes changes to foreign trade relations not only with global competitors like China but also with USMCA allies such as Canada and Mexico, as well as Latin American countries like Colombia.
Global trade reached a record $33 trillion in 2024, showcasing significant resilience to the ongoing economic and geopolitical challenges.
Shifts in foreign trade policy
The expectations are high as the new administration focuses on strengthening the US economy. To achieve this, it has proposed protectionist measures that need to be carefully analyzed to identify changes in the trade exchange model with the United States and to leverage any opportunities such changes may present.
According to the WTO (World Trade Organization), tariff impositions by the United States could impact global trade in 2025.
We will analyze some aspects that could change in trade exchange with the United States, focusing on risks and opportunities for Colombia. These are essential for all stakeholders in the country’s foreign trade to monitor and understand their potential effects on Colombia's trade system.
Proposed tariff barriers and their Impact on trade in Goods and services
The new trade policies suggest changes to US tariffs, which could substantially affect global trade dynamics. As a major consumer market and a key node in cross-border value chains, these changes could also impact Colombia, the United States' principal trade partner in Latin America. Potential protectionist measures may alter conditions established under the FTA.
Globally, 2023 trade data indicates that economies most affected would include:
China: $280 billion trade surplus
India: $45 billion
European Union: $205 billion
Vietnam: $105 billion
Although relatively lower tariffs are proposed for US imports, significant impacts could also extend to:
Mexico: $150 billion trade surplus
Canada: $70 billion
Japan: $70 billion
South Korea: $50 billion
In 2024, the main products exported from China to the United States included:
Electronics: Phones, computers, and video game consoles
Critical Materials:
Graphite: China dominates 90% of global production
Germanium and Gallium: Essential for technology, controlled by China
Lithium Batteries: Key for EV components
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European Market Vulnerabilities
The proposed measures may also impact European countries like Spain, particularly its automotive industry, which contributes 10% of Spain's GDP and heavily depends on trade with the US. Additionally, consumer and luxury goods exports could face higher tariffs. The EU, including Germany, Ireland, and Italy, heavily relies on the US market for exports, making these economies particularly vulnerable.
Colombia and Its Trade Relationship with the US
In 2024, Colombia strengthened its trade ties with the US, which accounted for over 25% of Colombia's total exports. Key products include petroleum, flowers, coffee, bananas, and coal.
Agricultural Products (HS Chapters 09, 06, and 08):
Coffee (0901): A flagship product representing over 30% of agricultural exports to the US. Thanks to the FTA, roasted and soluble coffee is exported with reduced or zero tariffs, exceeding $3.8 billion in 2023 (DANE).
Flowers (0603): With a 70% market share in the US, Colombia is the leading flower supplier, made competitive by tariff benefits.
Tropical Fruits (0804): Products like bananas, avocados, and mangoes enter the US tariff-free, boosting agricultural diversification.
Textiles and Apparel (HS Chapters 61 and 62):
Colombian textile products like T-shirts, jeans, and sportswear gained competitiveness through tariff elimination. In 2023, exports grew by 12%, reaching $800 million.
Chemicals and Plastics (HS Chapters 28 and 39):
Exports of plastics and chemicals have seen steady growth, becoming a key component of non-traditional trade.
Manufactures and Industrial Goods (HS Chapters 84 and 85):
Machinery and appliances gained greater market access, representing expanding sectors with high potential.
Potential Impacts for Colombia
Increased Costs for Exporters:Protectionist measures such as new tariffs could directly impact key exports like coffee and flowers, reducing competitiveness against countries like Brazil or Ethiopia. For instance, in 2023, Colombia exported $3.8 billion in coffee and $1.7 billion in flowers (DANE).
Decline in Non-Traditional Exports:Emerging sectors like manufacturing and agro-industry, representing 22% of total US exports in 2023 (ProColombia), could face restricted market access under additional trade barriers.
Challenges in Attracting Foreign Investment:Protectionist policies often introduce market uncertainty, limiting foreign investment willingness. In 2023, Colombia received $12 billion in FDI, 30% of which originated from the US. Strategic sectors like renewable energy and technology could suffer under reduced investment flows.
The FTA has driven trade growth between Colombia and the United States, benefiting key sectors like agriculture, textiles, and manufacturing. However, the new US administration’s protectionist policies could pose significant challenges. Colombia must adopt a strategic approach, prioritizing diversification, innovation, and sustainability to mitigate potential impacts and strengthen its position in global trade.
At Roldán Logistics, we continuously monitor developments impacting Colombia's foreign trade, helping businesses navigate risks and seize opportunities.
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