The door is still open

Since July 24, 2026, Colombian goods entering the United States that are not expressly excluded carry an additional 12.5 percent duty under Section 301 of the Trade Act of 1974. Most coverage framed this as straightforwardly bad news. It is not good news. But after reading the final notice line by line, the picture that emerges is different from the headline: this measure leaves more doors open than it closes, and several of them have an expiration date.

Sixty percent of the basket pays nothing

Coffee, crude petroleum, gold and other precious metals were expressly exempted, on the grounds that domestic U.S. supply would be insufficient if they were taxed. Colombian coffee, which exceeded 5.5 billion dollars in exports during 2025, enters with no surcharge at all.

The exclusion lists go well beyond that headline. The annexes exempt entire categories that carry real weight in the Colombian basket: tropical fruits, vegetables and spices, including bananas, cocoa, mango, pineapple, papaya, vanilla and cinnamon; oil, gas and coal; and a broad set of chemicals, minerals and metals. Part A of Annex II alone covers 2,120 tariff codes.

Analdex, the Colombian foreign trade association, estimates that roughly one third of total exports is effectively exposed. AmCham Colombia puts the figure closer to one fifth. The real size of the problem sits between those two numbers, and it is a contained problem rather than a systemic one.

Check the tariff subheading before redesigning anything

The final notice runs 431 pages. Annex II contains fifteen exclusion lists identified as Parts A through O. Part A applies to all 60 investigated economies; Parts B through O are economy specific. And there is a technical wrinkle that changes the arithmetic: not all codes are exempt as entered, which means classification and entry practice determine whether a shipment pays.

The difference between sitting inside or outside an exclusion list is worth twelve and a half points. No price concession either side negotiates is going to be worth that.

It is a two hour exercise with a customs broker. In several cases we reviewed, the answer was that the goods were never covered at all.

The advantage Brazil, Vietnam and China do not have

Colombia has held a Free Trade Agreement with the United States since 2012, eliminating or reducing to zero the most favored nation duty on the large majority of bilateral tariff lines. Brazil, Vietnam, China and India have no equivalent.

The 12.5 percent duty stacks on top of whatever rate applies to the good. For Colombian merchandise, that means stacking on a base of zero or close to zero. For Brazilian or Vietnamese merchandise, the same percentage sits on a general rate that is materially higher. The result is that in categories where they compete head to head, the total landed cost of a Colombian product remains lower. For a sourcing manager comparing suppliers, that is the number that matters, and very few Colombian exporters are currently putting it on the table.

The gap is regulatory, which is why it closes fast

Washington is not asserting that Colombian exports are produced with forced labor. What it assessed was whether each economy prohibits and effectively controls the entry of goods made under those conditions from third markets. This is a regulatory gap, not a commercial or geopolitical sanction.

The mechanism is an Agreement on Reciprocal Trade, or ART. It is not a free trade agreement but a bilateral commitment through which a country formally undertakes to impose and enforce the prohibition. Critically, it does not require the prohibition to already be in force. A concrete, verifiable commitment is enough. Cambodia, Guatemala, Honduras, India, Sri Lanka and Trinidad and Tobago changed brackets in seven weeks.

Where the real exposure sits

Cut flowers, apparel, food preparations and certain manufactured goods carry the risk. Close to 78 percent of Colombian flowers go to the United States, and the sector would pay roughly 250 million dollars a year under the new duty. Ecuador and the Netherlands, direct competitors in cut flowers, landed two and a half points lower.

Sources: USTR, Analdex, Asocolflores and AmCham Colombia. Reference figures as of July 2026.

The strong peso: the other side of the coin

With the reference rate at 3,144.14 pesos per dollar on July 31, 2026, Colombia is recording one of the sharpest appreciations of the century, close to 30 percent over twelve months and the strongest among emerging market currencies. Bancolombia estimates fair value between 3,500 and 3,878 pesos and projects a gradual correction toward a 3,600 to 3,800 range over the next twelve months.

That projection is precisely what turns the situation into an opportunity. A strong peso squeezes exporter revenue, but it lowers the cost of every dollar of input, machinery or capital good imported to produce exportable goods.

Two instruments are built to capture that benefit. Plan Vallejo, Colombia's inward processing regime, allows imports of raw materials, inputs and capital goods free of duty and value added tax when the finished good is exported, with demonstration periods of up to 36 months for agriculture and floriculture. Free trade zones address cash flow: foreign goods pay no duty or VAT while they remain inside, and export income is taxed at a single 20 percent rate. Colombia has more than 110 free trade zones operating across more than 20 departments.

Three moves, in this order

One. Use the strong peso to import capital goods and raw materials under Plan Vallejo or a free trade zone regime. The window has an expiration date and the market has already set it at 2027.

Two. Use the free trade zone as a transformation platform to defer customs charges and relieve cash flow, which is where the tariff hits mid sized exporters first.

Three. Reposition the commercial argument. Do not compete on price against the tariff. Compete on total cost of access, transit time and volume flexibility, the three variables where Colombia wins.