Following Donald Trump’s warning to put massive tariffs on Colombia in retribution for its unwillingness to accept deportation flights from the United States, Asian markets largely slumped Monday because of new trade concerns.
In addition, traders were evaluating the effects of a new, less expensive Chinese generative AI program amid assertions that it can outperform well-known competitors and concerns that a recent boom in the field would be questioned.
As he refrained from enacting strict tariffs on China and other allies as soon as he took office, as he had threatened to do, stocks saw a good surge last week on the expectation that Trump 2.0 would adopt a more lenient stance toward international trade.
However, there were concerns raised on Sunday when it was announced that he would cancel the visas of government officials and impose a 25% tariff on Colombian imports, which would increase to 50% the following week.
President Gustavo Petro’s blocking of deportation flights from the United States prompted the action.
Petro first declared 25% retaliatory tariffs on U.S. goods in response to Trump’s decision.
\However, Bogota eventually changed its mind and consented to take in the exiled citizens, claiming to have “broken the impasse,” according to Foreign Minister Luis Gilberto Murillo.
Words are not as powerful as actions. Dane Cekov of Sparebank 1 Markets stated, “The Colombian situation simply demonstrates how little it takes for Trump to use tariffs as a negotiation tool.”
