US tariffs on Colombia are held ‘in reserve’ and not signed, says the White House, as Colombia has agreed to Trump terms. Visa sanctions on Colombia are to remain in effect. Markets slightly pull back some of the initial moves seen post the announcements. MXN is now down 0.7% (vs about -1%) earlier
Go deeper: The Colombian government has agreed to all of President Trump’s terms, including the acceptance of all undocumented immigrants from Colombia returned from the US (Bloomberg). As a result, the IEEPA tariffs will be held ‘in reserve’ (i.e. not signed) unless this agreement is not adhered to. That said, Visa sanctions will remain in effect, till the the first planeload of Colombian deportees is successfully returned (Bloomberg).
Market impact: Following a broader risk-off tilt earlier this morning, we see the dollar very slightly give up some gains. MXN is down just 0.7%, vs about -1% earlier (see our note earlier here).
Our trader had expected a 2% move at the USDCOP open later in the day after the tariff announcements. He had flagged that before this weekend they had been seeing a good appetite for COP as they believe the position was starting to shift from Neutral/UW to OW/Neutral.
Now that the tariff situation has been mostly cleared, we think that we could see a resumption of this trend noted by our trader.