As the world was getting ready to start a new week and recover from the actions of the new US President, it had a new one to cope with. Given that the current administration is focused on America First, the deportation of illegal immigrants has started. Colombia is also present in this exercise, but its President suddenly denied a US plane to land.
This denial led to the US President taking swift and strong actions. The first was to implement an emergency tariff of 25% that would increase to 50% within a week on all imports from Colombia. Second was the shutting down of Visa processing at Bogota. It included other actions that were going to impact the country.
At first, this resulted in a strong statement and reciprocal warning of a 50% tariff. However, within hours a press release stated that Colombia agreed to the conditions set and the actions would be not implemented and put on hold.
It might be the first time that such a quick action and deal occurred between two countries. The problem with this will be heather it becomes the go-to move and way for the new US administration. If it does then the level of risk and uncertainty that is being factored in by governments currently is way low.
The financial markets will surely take note of the same and will be ready to react in future if the similar events take place. The focus for now will be Canada and Mexico as February 1st approaches, the date when 25% tariff are suppose to be announced.
Comments