Ecuador has decided to introduce a steep 27% tariff on products imported from Mexico. This decision was announced by President Daniel Noboa, who stated that the move was necessary to ensure fair treatment for Ecuadorian businesses. According to Noboa, Ecuador is open to signing a free trade agreement with Mexico, but not under conditions that he believes are unfair.
Until such a trade deal is finalized, all Mexican goods entering Ecuador will be subjected to this new tariff. This means that businesses and consumers in this nation might soon see price increases on Mexican products. However, Noboa did not provide further details on what he considers unfair or what led to this drastic action.
Trade Disruptions and Economic Impact
Trade between the two nations is not massive compared to Mexico’s other international trade relationships. In 2023, Ecuador imported around $541 million worth of goods from Mexico. One of the most significant imports was medication, which made up about 12.6% of all goods purchased from Mexico that year. Other imported products likely include food, electronics, and industrial materials.
Despite this, Ecuador remains a relatively small trading partner for Mexico. Data from the Mexican government shows that it accounted for less than 0.1% of the total value of Mexico’s exports last year. This means that, while the new tariff may have a notable impact on local buyers and businesses, it might not cause major economic harm to Mexico as a whole.
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Meanwhile, Mexico’s economic ministry has not yet responded publicly to Ecuador’s announcement. It remains unclear if Mexico will take any retaliatory action or attempt to negotiate a solution.
A History of Tensions Between Ecuador and Mexico
The new tariff decision comes against a backdrop of growing tension between the two nations. Earlier in 2024, diplomatic relations between Ecuador and Mexico suffered a major setback. Authorities ordered a raid on the Mexican embassy in Quito to arrest former Vice President Jorge Glas, who had been seeking asylum there.
The dramatic incident was captured on security cameras, showing police clashing with Mexican diplomats during the arrest.
This event deeply strained relations between the two nations. In response, Mexico cut off diplomatic ties with Ecuador. Glas had sought asylum in Mexico to escape embezzlement charges, arguing that the accusations were politically motivated. However, Ecuador’s government insisted on his arrest, leading to the controversial embassy raid.
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Since taking office in late 2023, President Daniel Noboa has been pushing a tough agenda, aiming to restore order in the nation. He has declared “war” on criminal groups and taken bold steps to combat rising crime. His latest decision to impose tariffs on Mexican goods seems to be another example of his firm approach to governance.
As of now, there is no sign of a resolution between Ecuador and Mexico regarding trade or diplomatic relations. The 27% tariff is expected to stay in place until further notice, leaving businesses and consumers to deal with the economic consequences.
