NEW DAY, NEW TARIFF THREAT: The Trump administration on Sunday announced they are not moving forward with plans to impose up to a 50 percent tariff on Colombia — threats Donald Trump made after the country turned away U.S. military aircrafts of detained Colombian migrants. "The Government of Colombia has agreed to all of President Trump’s terms, including the unrestricted acceptance of all illegal aliens from Colombia returned from the United States, including on U.S. military aircraft, without limitation or delay,” the White House announced in a statement from its press secretary late in the evening. The statement indicated that the White House had drafted a legal memo underscoring Trump’s authority to use the International Emergency Economic Powers Act, which grants a president sweeping authority to control economic transactions if they declare an emergency. “Based on this agreement, the fully drafted IEEPA tariffs and sanctions will be held in reserve, and not signed, unless Colombia fails to honor this agreement,” the press statement said. Why it matters: The announcement from Trump’s White House is the latest example of the administration walking back plans to impose duties on trading partners. And it’s set to irk Trump’s hardcore protectionist backers who are pining for him to take sweeping action in the early days of his administration. The statement comes after the president broke his vow from November to impose 25 percent tariffs on both Mexico and Canada his first day in office, a timeline he kicked down the road until Feb. 1, which is also when he said he would impose 10 percent duties on China. Those timelines clash with the president’s Day One action on trade that tasked federal agencies and departments, such as the Office of the U.S. Trade Representative and the Commerce Department, with an April deadline to prepare reviews of trade deals which could be the basis of new tariff action. One step back: Trump and Colombian President Gustavo Petro went tit-for-tat on Sunday after Trump announced he would “immediately” impose 25 percent tariffs on the country, which would increase to 50 percent in a week. Petro pledged to retaliate with tariffs of his own, but earlier in the day a statement said he arranged a presidential plane to “facilitate the dignified return of the nationals who were to arrive today in the morning.” Scott Lincicome, vice president of general economics at the Cato Institute, told Morning Trade that countries could be more likely to brush aside the United States if the pattern continues, and potentially expand trade with non-U.S. countries to fill the void. "I just wonder whether anybody in the White House really is thinking about just how much all of this uncertainty will weigh on the U.S. economy and on U.S. and global trade policy,” Lincicome said. "If you do this all the time, it's going to work a few times, and then people are just going to say, ‘screw this.’” "The U.S. is still a wonderfully valuable market, but at the same time, who wants to deal with the headache of being threatened for non-trade stuff all the time?,” Lincicome said.
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