New US trade war with Colombia could open door for China

Donald Trump’s plan to punish a key Latin American ally could lead to economic ructions in Australia down the line, an expert says.

Donald Trump’s burgeoning trade war with Colombia might not change the price of coffee at Aussie cafes, but there could be long-term impacts for our economy if China can take advantage, an expert says.

US President Mr Trump on Sunday ordered sweeping tariffs and sanctions against Colombia in retaliation for its refusal to accept military deportation flights, seeking to punish one of his most defiant critics in Latin America.

Colombia’s left-leaning President Gustavo Petro then announced his own tariffs on US products vowing that returning migrants should be treated with dignity.

At time of publication, the White House said that Colombia had backed down and agreed to accept repatriated citizens on military flights.

The Trump administration said it will suspend planned tariffs and most sanctions but there waswas no immediate confirmation from Colombia

Mr Trump, back in office for less than a week, promised to impose 25 per cent tariffs on products from Colombia – the source of one-fifth of coffee in the US – and to raise them to 50 per cent in a week.

Professor Markus Wagner, an expert in international economic law at the University of Wollongong, dashed cold water on any Australians’ fears the trade stoush could raise the price of coffee Down Under.

“It might actually become cheaper in a weird way, because if you look at supply and demand, the US might not be demanding as much,” he said.

A tariff war has erupted between US President Donald Trump and Colombian President Gustavo Petro. Picture: Jim Watson/Yuri Cortez/AFP

“Therefore the supply becomes slightly larger elsewhere. I don’t think the coffee at your coffee shop will be impacted very much at all.”

Professor Wagner said, however, said Mr Trump’s “weaponisation of trade relations” through tariffs could push countries like Colombia away from America and closer to China.

The Asian superpower is already South America’s top trading partner and a major source of foreign investment, while also strengthening military ties with nations like Venezuela.

“If this plays out over other places (the tariffs), there’s going to be some kind of reorientation potentially by these countries with respect to China,” Professor Wagner said.

“It is clear that China has a fairly strong foothold in Latin America already, and if you antagonise too many countries and too many governments in the region, that they will reorient and that will then flow on effects on a country like Australia as well.”

He said the impact comes in the form of China sourcing materials from Latin America that it would usually source from Australia.

Chinese President Xi Jinping warned in December there would be "no winners" in a trade war with the US. Picture: AFP

Mr Trump set the scene for a trade war with China, promising 10 percent tariffs on Chinese goods and repeatedly making claims that the crucial trade ports in the Panama Canal – located in the titular Central American country – were being controlled by China.

“China is operating the Panama Canal and we didn’t give it to China,” he said.

“We gave it to Panama and we’re taking it back.”

Colombia is historically one of Washington’s closest allies in Latin America and enjoys a free-trade agreement with the US.

Colombia is one of the world’s biggest exporters of coffee. Picture: AFP/Raul Arboleda

“These measures are just the beginning,” Mr Trump wrote on his Truth Social platform.

“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!”

Not to be outdone, Mr Petro, a former leftist guerrilla, said he had instructed his minister for external trade “to raise tariffs on imports from the US” to 25 per cent.

In a long broadside on X addressed to Mr Trump he declared: “You will never dominate us.” New US Secretary of State, Marco Rubio, is days away from a trip to Latin America aimed at pushing Mr Trump’s agenda.

Mr Rubio said that the US embassy in Bogota was suspending all issuance of visas.