What Jumps Out: When Ideologies Clash

Up until late yesterday, it was a quiet weekend, little to report, and really only the Banco de la República – Colombia meeting to look forward to on Friday, however, when you place Donald Trump and Gustavo Petro in the same hemisphere, you are never far away from a headline.

In the red corner is President Donald Trump, a man who even before he came to power was threatening the sovereignty of countries as far apart as Greenland/Denmark and Panama, and who since he was sworn in, has simply ridden roughshod over everything and everyone in his path.

Petro on the other hand, is, with the tempering of Luiz Inácio Lula da Silva of Brazil over the years, now the de facto head of the left in South America. I have no doubt whatsoever he was waiting for his moment to try a little ambush.

In short:

1. Over 20,000 Colombians were deported last year.
2. Reportedly, two US planes were approved to deliver more yesterday.
3. Before they reached Colombian airspace, they were turned around.
4. Petro claims it was because they were inhuman military planes as opposed to commercial planes. He even offered to send a presidential plane.
5. Trump announces 25% tariff on all goods imported, to rise to 50%. No new visas for Colombians, with Petro and his cabinet banned from travel.
6. Late last night, the foreign minister announced an agreement that has been met based on dignified travel conditions for Colombian citizens.

Lots of saber-rattling and of course the political right of Colombia was happy to be Trump’s peanut gallery, however, there are two basic points that matter.

1. In any diplomatic relationship, the due care of one’s people is priority number one. Whether they be illegal immigrants or model citizens, they have equal rights to dignified treatment.
2. Colombia needs to look hard at finding alternative markets. As the commerce minister stated, you cannot have a bilateral trade relationship based on fear. One can only imagine the panic at the local banks with comments about freezing banking activity, let alone the clients who have parked $100 million overseas.

The situation appears to be blowing over, but Colombian businesses need to have a good think. Petro may sit in the opposite corner in terms of ideology however, Trump doesn’t much care which political party you represent, if you are standing in the way of his extremist policies, you will get run over.

As for the central bank, let’s see: analysts are expecting a 25bps cut to 9.25%, however hopefully, it will be more.

Have a great week.

Roops.

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Headline Image: President Donald Trump portrait. Photo credit: Library of Congress.