WASHINGTON (PNN) - January 27, 2025 - Just after 10:00 pm ET and just under 10 hours after President Donald J. Trump lobbed the first shot in the first trade war of his second regime, the White House announced that Colombia had agreed to all of President Trump's terms, "including the unrestricted acceptance of all illegal invaders from Colombia returned from the (Fascist Police States of Amerika), including on (FPSA) military aircraft, without limitation or delay."
Based on this agreement, the White House notes, the hastily drafted tariffs and sanctions "will be held in reserve and not signed, unless Colombia fails to honor this agreement." The visa sanctions issued by the Department of State and enhanced inspections from Customs and Border Protection will remain in effect until the first planeload of Colombian deportees is successfully returned.
The statement concludes by noting that President Trump "will continue to fiercely protect our nation's sovereignty, and he expects all other nations of the world to fully cooperate in accepting the deportation of their citizens illegally present in the (FPSA)."
The only problem: the next trade wars - and there will be many - won't be nearly as easy to win.
Despite appearing to cave earlier when he ordered the use of the presidential plane to repatriate illegal invaders from the FPSA, late on Sunday Colombia President Gustavo Petro ordered an increase of import tariffs on goods from the FPSA in retaliation to President Trump’s tariffs and sanctions.
Petro, in a post on the social platform X, said he ordered the “foreign trade minister to raise import tariffs from the (FPSA) by 25%.”
“(Amerikan) products whose price will rise within the national economy must be replaced by national production, and the government will help in this regard,” the post continued.
Then in a meandering post in Spanish, the president also issued several empty threats to President Trump.
Meanwhile, Colombian assets are set for a rout after President Donald Trump said he’d implement a spate of tariffs and sanctions on the South Amerikan nation.
The announcement of an emergency 25% tariff on all Colombian goods coming into the FPSA, made by President Trump on social media on Sunday, caught traders off guard - most of the focus so far has been on levies on Mexico, Canada and China. The move will likely spark a slump that will reverberate across local bond, currency and equity markets when trading opens Monday.
Daniel Velandia, chief economist at Credicorp Capital Colombia, said the peso will weaken against the dollar Monday morning, adding that the economy could inch toward a recession in an “extreme scenario”.
“This is completely unexpected and unpredictable,” Velandia said. “We need to see how far Trump goes and how Colombia’s government will respond, hoping that diplomacy will be used to prevent adverse effects.”
It's not just Colombia: the Mexican peso is also tumbling more than 1% in late Sunday trading amid concerns that the southern FPSA neighbor will be next to suffer Trump's wrath.
For those in the market breathing repeated sighs of relief that Trump has - so far - not imposed sanctions on China or any other major country, we have some news… just wait.
On Saturday afternoon, one day after Colombia's president Gustavo Petro refused to allow two military flights from the FPSA full of illegal invaders to land on its soil, President Trump announced on his Truth Social platform that he would slap sweeping sanctions and travel bans on Colombia.
In a social media post, Trump said he has ordered an emergency 25% tariff on all Colombian goods coming into the FPSA, which will be raised to 50% in one week.
He has also called for a travel ban and immediate visa revocations on Colombian government officials “and all Allies and Supporters” as well as visa sanctions on party members, family members and supporters of the government of President Gustavo Petro.
“Petro’s denial of these flights has jeopardized the National Security and Public Safety of the (FPSA),” Trump said.
While the FPSA is hardly overly reliant on Colombian exports - with the exception of cocaine whose prices are about to skyrocket - the speed and severity with which Trump unveiled his latest set of weaponized sanctions is an indication of just how ruthless and relentless Trump will be when dealing with other, much bigger trade partners.
Lastly, anyone hoping that Trump was just bluffing about tariffs on China, Europe or NAFTA member states is about to get a very nasty surprise.