| IMHO: Colombian President Gustavo Petro made an error in capitulating to U.S. President Trump’s demand to allow the repatriation of Colombian migrants under the threat of imposed tariffs and sanctions. What he should have said was: “Bring it on!“ | |
| Approximately 20% of the coffee imported into the United States is from Colombia. Approximately 66% of Americans drink coffee everyday. President Trump’s threat was to raise the price of coffee for Americans (who would be paying the tariff) if Colombia didn’t agree to receive their citizens back. | |
| Some of the main exports from Colombia to the United States are: | |
| Crude Oil: This is the largest export, valued at around $6 billion annually. | |
| Coffee: Colombia is one of the world’s top coffee producers, exporting nearly $1.8 billion worth of coffee to the U.S. each year. | |
| Cut Flowers: Colombia is a major supplier of cut flowers, with exports totaling approximately $1.6 billion. | |
| Gold: Precious metals, including gold, are also significant exports. | |
| Bananas: Another important agricultural export. | |
| All of these are essentially fungible goods on the world market – meaning they are completely replaceable by similar goods from other suppliers (countries) if there is a significant price hike. But when the price hike is only in one country, imposed on that country by its own government, the price hike need not cripple the tariffed country’s economy. They can still sell their goods to other countries. | |
| Yes, there is no doubt tariffs would have a significant hit on Colombia’s exports to the United States. The counter to this is there would be little to no impact on Colombia’s exports to other countries who aren’t imposing a tax on their own citizens for your products. The price of crude oil (gasoline), coffee, flowers, gold and bananas would go up in the United States for the long term, but the effect on Colombia would be short term at worst. Columbia might have to reduce their prices – for other parts of the world – to maintain their economy / market share during the price stabilization fluctuation, but it is hard to believe this would be a long term hit (except to flowers and bananas due to spoilage which may cause the loss of profit for the majority of that season’s product). | |
| The reality is that many (if not most) of the other countries involved in those markets / exports to the U.S. would also raise their prices to increase profit knowing the tariff will provide market-message protection for their price gouging. This is the nature of global capitalism… They don’t HAVE to increase their prices by the amount of the tariff, but I can easily see them increasing by 10-to-15% and laughing all the way to the bank. | |
| This will result in a “mild” round of inflation in the United States and (potentially) an increase in the Federal interest rate to fight the inflation. So, who really, really gets hurt? The American consumer… when (if) our economy tanks! | |
| President Petro should have called #47DonTheFelon’s bluff. The emperor has no clothes. The sooner some other global leader points this out, the better / safer the global economy will be. | |
| Reality Check: Although the Colombian numbers above are in the billions of dollars, it should be pointed out they are “almost” insignificant for the overall U.S. economy which is $25+ Trillion per year. The issue is there is no way to know in advance when any given economic factor will (or is likely to) become a tipping point for the U.S. economy. President Trump’s “poker play” is that you are more afraid of damage to your economy than he is is of the damage to our economy. | |
| . | |
| Click here (27 January) to see the posts of prior years. I started this blog in late 2009. Daily posting began in late January 2011. Not all of the days in the early years (2009-2010) will have posts. | |
Posts Tagged ‘Colombia’
Never Appease A Bully
Posted in Economics, Philosophy, Politics, tagged #47DonTheFelon, American Economy, American Politics, Bananas, Coffee, Colombia, Colombian President Gustavo Petro, Crude Oil, Economics, Flowers, Gold, Philosophy, Tariffs, United States on January 27, 2025| 3 Comments »
Butterflies, Candles, And Cracks In The Walls
Posted in General Comments, Movie Review, Movies, Reviews, tagged Abuela Alma Madrigal, Academy Awards, Beauty and the Beast, Best Animated Feature, Bruno Madrigal, Byron Howard, Casita, Colombia, Diane Guerrero, Disney Movies, Encanto (2021) – movie review, General Comments, Germaine Franco, Grammy Awards, Isabela Madrigal, Jared Bush, Jessica Darrow, John Leguizamo, Latin American, Lin-Manuel Miranda, Luisa Madrigal, María Cecilia Botero, Mirabel Madrigal, Movie Reviews, Reviews, Stephanie Beatriz, Strong Movie Recommendation, Surface Pressure, We Don’t Talk About Bruno, What Else Can I Do? on November 26, 2025| Leave a Comment »
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