Ecuador and Colombia Hold Critical Meeting in Quito Today to End 30% Tariff Trade War

The most consequential diplomatic meeting in recent Ecuadorian history is happening today in Quito, and the outcome could affect everything from your electricity bill to your grocery prices.

What's Happening

A high-level Colombian delegation headed by Foreign Minister Rosa Yolanda Villavicencio and Defense Minister Pedro Sanchez Suarez is in Quito today (February 6) for critical negotiations aimed at de-escalating a trade war that has spiraled rapidly since late January.

Colombia has proposed mutual elimination of the 30% tariffs as a starting point. Negotiations will also cover border security cooperation -- the original issue that triggered the dispute.

How We Got Here

The timeline has moved fast:

• January 20: President Noboa announces a 30% "security tariff" on all Colombian imports, citing Colombia's lack of cooperation in combating narcotrafficking at their shared border
• January 22: Colombia suspends all electricity exports to Ecuador indefinitely
• January 28: Ecuador retaliates by hiking the SOTE oil pipeline transit fee for Colombian crude from $3 to $30 per barrel -- a 900% increase
• February 1: Both countries' 30% tariffs take effect simultaneously
• February 3: Over 1,000 truckers and merchants march at the Rumichaca border crossing demanding both governments back down
• February 6: Today's emergency meeting in Quito

The Damage So Far

Bilateral trade between Ecuador and Colombia exceeded $3 billion last year. Since the tariffs took effect on February 1, merchandise transit at the main Rumichaca border crossing has dropped to near zero.

The electricity suspension is costing Ecuador approximately $2 million per day in replacement energy costs, according to Colombia's Ministry of Mines and Energy.

At the border, businesses on both sides are suffering. Edison Mena, president of a Colombian truckers association in Ipiales, warned that 38% of his city's economy depends on commerce with Ecuador. Similar concerns echo from Ecuadorian border towns in Carchi province.

What This Means for Expats

Grocery Prices

Colombia is a major source of imported food and consumer goods in Ecuador. A 30% tariff translates directly into higher shelf prices -- or empty shelves -- for Colombian-origin products. Watch for price increases on processed foods, cleaning products, certain produce, and manufactured goods.

Electricity

This is the big one. During Ecuador's devastating 2024 drought, Colombian electricity imports provided a critical lifeline. The rainy season is currently keeping hydroelectric reservoirs full, but if this dispute drags into the dry months (September-November), the 2024 blackout scenario could repeat.

Fuel Costs

The pipeline tariff escalation could ripple through fuel logistics and transportation costs.

The Economy

Ecuador's dollarized economy can't absorb trade shocks through currency adjustment the way Colombia can. A prolonged trade war adds stress to an already tight fiscal environment.

What to Watch

Today's meeting is the most important indicator. If both sides agree to a framework for tariff removal, expect a gradual normalization. If talks break down, prepare for the dispute to deepen -- and for the economic impacts to become more tangible in daily life.

Sources: El Universo, Primicias, Infobae