CAN Issues 10-Day Ultimatum to End Ecuador-Colombia Tariff War — Industry Says It Won't Be Enough

The Andean Community of Nations issued Resolution No. 2582 on May 7, ordering Ecuador and Colombia to withdraw their reciprocal tariffs within 10 business days or face further action. The body declared both countries' measures "incompatible with the Cartagena Agreement" — the foundational treaty governing intra-Andean trade.

The resolution lands amid one of the most aggressive trade escalations in the region's recent history.

The Escalation Timeline

Ecuador imposed a "security tax" on Colombian imports in February 2026, citing security concerns and Colombia's border control failures. The rate escalated rapidly:

• February 1: 30% tariff imposed
• Through April 30: Increased to 50%
• May 1: Raised to 100%
• June 1 (upcoming): Reduced to 75%

Colombia responded with retaliatory tariffs starting at 30% and escalating to 75% on select Ecuadorian products.

The Trade Impact

The numbers are stark. Through the first two months of 2026:

• Ecuador exports to Colombia: $145 million (+4.5%)
• Ecuador imports from Colombia: $248 million (-20.1%)
• Colombian exports to Ecuador: Down 60% through March 2026

Specific sectors have been hit hard. Energy exports saw a 77.1% decline, while sugar contracted 26%, representing over $40 million annually.

Industry Reaction: Skepticism

Business leaders on both sides aren't optimistic that the CAN resolution — or the reduction to 75% — will meaningfully change conditions.

Xavier Rosero of Fedexpor said the reduction "won't meaningfully change bilateral trade conditions given the tariff remains prohibitively high."

Juan Carlos Navarro of the Guayaquil Chamber of Industries argued: "This type of decisions shouldn't be temporary or political but part of stable, technical trade policy."

From Colombia, Javier Díaz of Analdex was blunt: "With a 75% tariff, it's impossible to conduct commerce."

Miguel Ángel González of the Guayaquil Chamber of Commerce noted that some importers may delay purchases until June, though many sectors require continuous Colombian supplies.

What This Means for Expats

Cost of living: Colombian goods — coffee, packaged food, household products, raw materials — have become significantly more expensive. A 75% tariff effectively doubles the cost of many imports before they reach retail shelves. The CAN's deadline creates a narrow window for normalization, but compliance is uncertain.

Business owners: If you import Colombian products or materials, plan for continued disruption through at least June. The 75% rate is still prohibitive for most trade.

Long-term outlook: Even if tariffs come down, the damage to bilateral trade relationships will take time to repair. The pattern of escalation — 30% to 50% to 100% and back — has destroyed predictability, which is what businesses need most.

Sources: El Mercurio, Primicias, El Universo