The United States applies tariffs of 25% on imports from Mexico and Canada, and 20% on those from China.
The tariffs that the United States has been applying since March 4, 2025 to products imported from Mexico, Canada, and China, of 25% in the first two cases and 20% in the Asian giant, and which have unleashed a trade war between these four countries, are generating uncertainty in Latin America and specifically in Ecuador, which already has a trade agreement in force with China, is about to sign one with Canada, is seeking to begin talks with the United States for a free trade agreement (FTA), and maintains broken relations with Mexico, although its commercial exchange remains standing.
What effects could be felt in Ecuador? Former Minister of Production, Foreign Trade, Investments and Fisheries Daniel Legarda analyzes that this trade war has a global impact, because trade between these countries represents more than 35% of all trade; and points out that, although initially the direct impacts will be seen in these economies, the indirect impacts will have several ramifications that affect the global economy, such as lower growth, recession in some cases, inflation, revaluation of the dollar, increases in interest rates and impact on the transportation of goods.
According to Legarda, this is compounded by widespread uncertainty, because President Donald Trump has announced that in April he will introduce new tariff measures, a global tariff and a tariff on agricultural imports, which will directly affect all countries. “There are no details of these announcements, but this will be a new level of direct impact.”
According to Julio José Prado, director of the Economic Environment Area at IDE Business School and also former Minister of Production, Foreign Trade, Investments and Fisheries, this environment generates a “very high” level of uncertainty because not only is there Trump’s decision to raise tariffs, but it is still unknown whether they will maintain them as announced or if there will be a review from one day to the next.
“This is generating a huge amount of speculation and uncertainty at an international level, because these countries represent a large part of global trade. In the free trade agreement that covers Mexico, Canada and the US alone, we are talking about more than 30% of world trade; and, if we add China, it exceeds 50%. Some spokesmen related to the White House have mentioned that this measure could be reviewed in the next few days... And we don't know if this is a measure of pressure, of negotiation in the Trump style, or if it is something that will be maintained for a little longer term, a few months or a few years,” says Prado.
Regarding Ecuador, he indicates that in the short term there may be very few direct effects, whether negative or positive, especially from a commercial point of view, given that Ecuadorian exports to the US, Canada and Mexico have no direct relationship, they are not in products that compete directly with those markets, but rather they are complementary, especially in the US and Canadian markets.
WHERE ARE THE GREATEST RISKS?
For Prado, the risks lie in a slowdown in US growth and he points out that the Atlanta Federal Reserve has drastically changed its growth expectations for that economy: from positive growth to a fairly strong decline, given specifically the issue of tariffs and the effect that it would have on the increase in costs, the increase in production, the loss of competitiveness and a possible supply problem for some non-important chains in the US.
According to Prado, this could cause a reconfiguration of supply chains and logistics at an international level with unexpected consequences, even worse if this trade war escalates to a European level.
Regarding Latin America, he believes that —beyond a more political or ideological component with certain countries— the products exported by the region are not highly competitive with the US, which, according to Prado, is more concerned about the steel, electronics (chips) sectors and all issues related to the automotive, metalworking, etc. industries, which is where there is more pressure, especially on the side of international competition with China, and perhaps some from Canada and Mexico.
Nery Merejildo, president of the board of directors of the Ecuadorian-American Chamber of Commerce (AmCham Guayaquil), indicates that, although the increase in tariffs in the immediate term directly affects exports from Mexico, Canada and China, making products more expensive for the American consumer, its application will ultimately affect the country's foreign trade.
“Let us remember that supply chains are integrated. The increase in production costs in these countries, which are also suppliers for ours, will end up affecting the prices of inputs, raw materials and final goods that our country demands,” he warns.
He points out that the current tariff policy applied by the United States will affect not only the hemisphere, but also global trade. “The impact will not only reach the external sector of countries, but also the productive competitiveness and growth of countries whose models of trade openness support the social economic development of their countries.”
Meanwhile, beyond the tariffs imposed on China, Mexico and Canada, Prado agrees with Legarda on the concern about the transversal tariffs that will be announced in April for all other countries. “This would be very dangerous for Ecuador and the other Latin American countries and would be very bad for global growth and the consequences would have to be measured now if this is implemented,” he analyzes.
The Ecuadorian Federation of Exporters (Fedexpor) indicated that it will remain under constant observation to analyze any possible indirect effect, particularly on the demand of the main international trading partners.
Meanwhile, the president of the Ecuadorian-Chinese Chamber of Commerce, Gustavo Cáceres, indicates that this trade war could benefit Ecuador, as he assures that the possibility that in the medium term there will be an impact on the consumption of imported products in general due to the reduction in the level of consumption of North American families can be considered as an opportunity for Ecuador to meet this demand, since many of the products that have been taxed are related to fruits, vegetables, dairy products, meats, among others.
He also said that in the medium term, the relationship between Ecuador and the United States would be expected to become a little more established, which could even open the doors to the signing of a trade agreement. Although, for Prado, the issue of a free trade agreement with the United States seems very complex in this environment and he points out that Ecuador must maintain the speed of processes such as the ratification of the recently negotiated trade agreement with Canada.
"PRESSURE WILL NOT HAVE THE EFFECT THAT PRESIDENT TRUMP SEEKS ON CHINA"
Regarding China, Cáceres recalls that the tariff applied by the US to imports from that country has doubled from 10% to 20%. He considers that this pressure is not correct and believes that it will not have the effect that President Trump seeks on China. “We know how Chinese diplomacy and the Chinese government operate, and they will not give in to this type of pressure in order to offer concessions to the US government. Time will tell us what will happen.”
However, he says that China has already imposed a 15% tariff through the State Council tariff conversion on products imported from the US such as chicken, wheat, corn, cotton, and 10% on products such as soybeans, beef, pork, fruits, vegetables, and dairy products. “In the short and medium term this will be transmitted to American consumers, so we have to wait and see what happens over the course of the days.”
For now, Prado says that Ecuador should not make the mistake of joining this trade war “as the government tried to do a month ago unilaterally by raising tariffs on Mexico.” “We gain nothing from that. On the commercial level, Ecuador should try to avoid any measure that generates higher production costs and indirectly enter into this trade war that unfortunately seems to be starting,” says the former minister.
