Following Trump... Ecuador imposes 27% tariff on Mexico

Impact of America's First Policy
Limited Effect on Mexican Economy
Diplomatic Dispute Escalates into Trade Issue

Ecuadorian President Daniel Noboa announced on the 3rd (local time) that "a 27% tariff will be imposed on Mexican products to ensure fair treatment for Ecuadorian producers." The photo shows President Noboa, who is seeking re-election, attending a televised presidential debate program on the 19th of last month. Photo by Reuters and Yonhap News Agency

Daniel Noboa, President of Ecuador, announced on the 3rd (local time) that "a 27% tariff will be imposed on Mexican products to ensure fair treatment for Ecuadorian producers."

President Noboa stated this policy through the social networking service X (formerly Twitter) on the same day, saying, "We are open to signing a Free Trade Agreement (FTA) with Mexico, but we cannot do so under unfair circumstances." He also shared the current status of Ecuador's trade balance with Mexico.

On the 3rd (local time), President Noboa shared the trade balance status between Ecuador and Mexico through X (formerly Twitter), stating, "We are open to signing a Free Trade Agreement (FTA) with Mexico, but we cannot do so under unfair conditions." Photo by President Noboa on X capture

According to the Mexican government's statistics on the Mexican Commodity Trade Balance (BCMM), Ecuador's imports from Mexico in 2023 amounted to $591 million, while exports to Mexico were $227 million. The trade deficit reached $364 million (approximately 530.7 billion KRW). The trade deficit has persisted since statistics began being provided in 2006. As of 2023, Ecuador's main imports were pharmaceuticals (11.5%), and the key export product was cocoa beans, the raw material for chocolate (31.8%).

The impact of Ecuador's measures on Mexico is expected to be minimal. CNN evaluated, "Ecuador is a small market accounting for less than 0.1% of Mexico's total exports, so the impact of this measure on the Mexican economy will be limited."

Foreign media have suggested that U.S. President Donald Trump's America First policy, which uses tariffs as a weapon, may have influenced President Noboa's announcement. CNN noted, "This announcement came shortly after President Trump postponed his plan to impose a 25% tariff on Mexican products, indicating that tariff negotiations between the U.S. and Mexico may have had an influence."

Mexico-Ecuador Trade Status. Ecuador's imports from Mexico in 2023 amounted to 591 million USD, while exports were 227 million USD. Source: Mexican Government

Noboa's argument aligns with the logic of President Trump, who proposed imposing a 25% tariff on Mexico and Canada. Trump cited protecting U.S. industries as the reason for his tariff policy and claimed it was a measure to pressure Mexico to crack down on illegal immigration to the U.S. and the smuggling of fentanyl, known as 'zombie drugs.' The Arab media outlet Al Jazeera reported, "President Noboa also emphasized similar reasoning, stating that the measure is to protect domestic industries and ensure fair treatment for producers."

Some analysts view this measure as a diplomatic dispute escalating into a trade issue, given that diplomatic relations between Ecuador and Mexico were virtually severed in April last year. At that time, Ecuadorian police raided the Mexican embassy in Quito and arrested Jorge Glas, former Vice President of Ecuador. CNN pointed out, "Following this incident, relations between the two countries deteriorated rapidly, and President Noboa's announcement of this tariff measure is seen as having diplomatic significance beyond a mere economic action."

Meanwhile, Noboa, Ecuador's youngest president, appears to be focusing on strengthening relations with Western countries, including President Trump. During his re-election campaign schedule, he took time to attend the inauguration ceremony held last month in Washington D.C., USA. He evaluated Trump's re-election as a 'victory for Latin America' and hinted at strengthening cooperation with the Trump administration.