Is Colombia no longer a US ally in the war against drugs?

The fight against drug trafficking has returned to the centre of US policy in Latin America. Since taking office, the Trump administration has employed more aggressive financial, legal and now military tactics to pursue and deter the region’s drug trafficking organizations and the individuals and companies that abet them. As the recent deployment of three Naval destroyers to the waters off Venezuela shows, the administration is framing drug trafficking as an issue of national security and a domestic political priority.

Colombia has largely avoided direct pressure from Washington, despite accounting for over two-thirds of global coca production. That may soon change. The Trump administration appears poised to decertify Colombia as an ally in the fight against drugs—a move that would place Bogotá and President Gustavo Petro squarely in Washington’s crosshairs.

Background

Each year, the US government assesses the efforts of main drug producing and transit countries to reduce illicit crops, enforce narcotics laws, and collaborate with U.S. authorities. Countries deemed non-cooperative are decertified, risking the loss of U.S. aid and support for multilateral loans. Colombia was decertified in 1996–97, amid allegations that then-President Ernesto Samper received campaign funds from drug cartels.

For much of the following two decades, Colombia was one of Washington’s closest allies in the region, receiving over USD 10 billion in security assistance between 2000 and 2015. Much of this support came under Plan Colombia, which helped the armed forces weaken the Revolutionary Armed Forces of Colombia (FARC) and paved the way for the group’s disarmament in 2017. However, security conditions deteriorated as rival groups moved into territory vacated by the FARC, taking control of drug production and trafficking routes.

Under Petro, the situation has worsened. His initial strategy of negotiating peace deals with armed and criminal groups has largely failed, allowing these organizations to expand territorial control and illicit activities. Coca and cocaine production have surged, with the UN reporting a 53% increase in potential cocaine output in 2023. Major drug trafficking groups—including the National Liberation Army (ELN) and Clan del Golfo—have grown in manpower, geographic reach, and criminal portfolios.

Implications of decertification

Close political ties have shielded Bogotá from decertification in the past, but bilateral relations have soured under Trump and Petro. Tensions flared over the repatriation of undocumented migrants in January, and both governments temporary withdrew their top diplomatic representatives in July. With the U.S. administration set to announce its decisions by 15 September, the decertification of Colombia appears imminent.

What would this mean for Colombia’s economy and investment climate?

Decertification presents a range of economic, trade, compliance and security risks. The most immediate impact would be felt in US aid, which despite recent cuts still amounts to hundreds of millions of dollars and is critical for intelligence gathering, aerial operations, and humanitarian first-responders. Decertification would likely trigger the suspension of many remaining programs, further straining the capabilities of the armed forces and police. In addition, the US could withhold support for loans to Colombia from multilateral lenders institutions like the World Bank and IDB. According to the American Chamber of Commerce in Colombia, the country risks losing as much as USD 500m from the IDB alone in a worse-case scenario.  

Decertification would also increase scrutiny by US regulators and law enforcement, exposing Colombian companies to investigations, litigation, and financial sanctions. As in the case of Mexico, companies found to support drug trafficking groups in Colombia—by facilitating money laundering, paying extortion demands, or engaging with cartel-linked third parties—could be exposed to terrorism-financing investigations. The ELN and main FARC dissident factions have long been declared foreign terrorist organizations by the US government.

Given the risks, tighter security measures and compliance costs could, in turn, create operational disruptions and supply chain bottlenecks. Colombia would also be at risk of facing new tariffs and restrictions on access to the US market should the Trump administration choose to fully ramp up pressure on Bogotá.

Taken together, decertification coupled with targeted sanctions and commercial restrictions would deal a further blow to investor confidence, which has already been weakened by deteriorating public finances. In June, the Petro administration abandoned the fiscal rule, triggering further downgrades in sovereign credit ratings. The fiscal deficit is set to balloon to 7.1% in 2025—its highest level in three decades barring the pandemic. Both the government and private companies face the prospect of still-higher borrowing costs, affecting financing for infrastructure projects and other major investments.  

Multiple scenarios

The doomsday scenario, however, is not the most likely outcome. The president exercises broad discretion over what measures to take in response to decertification. One option is a national security waiver, which would allow aid and security cooperation to continue despite Bogotá’s non-compliance. In this case, business impacts would be minimal.

Even without a waiver, the Trump administration can still issue specific exemptions to allow certain cooperation programs to continue—as it has effectively done since initially suspending security and law enforcement aid in January. Programs that are cut, moreover, can be reactivated if the administration deems Colombia to be meeting its commitments. Similarly, more aggressive actions such as tariffs or financial sanctions against Colombian individuals or companies are not automatically triggered by decertification.

What comes next?

Multiple scenarios and on the table, and the ultimate outcome will depend on negotiations over the coming months. Still, given the current state of relations between Petro and Trump—and the latter’s penchant for maximalist tactics—decertification is likely.

The Trump administration is clearly signalling an aggressive, uncompromising stance against drug trafficking. Given this, the US will likely adopt tough measures, at least initially. Expect the suspension of new lines of aid and security cooperation and harsh rhetoric accusing the Petro government of supporting drug trafficking. To underscore the point, the administration could withdraw the visas of Colombian officials associated with the government’s Total Peace strategy.

However, Bogotá is also likely to take concrete steps in the coming months to respond to US concerns. Petro’s approach to drug policy has already shifted toward interdiction as peace negotiations falter. Over the past eight months, his administration has been willing to accommodate certain US demands to preserve bilateral ties. A similar response to decertification is likely, helping Colombia avoid damaging measures such as economic sanctions or a punishing spike in tariffs (Colombia currently faces the 10% baseline level).

Even so, decertification will leave its mark on the business environment. Beyond direct implications, the decision will focus the attention of the Trump administration and other international actors on the strengthening of armed groups, explosion of drug production, and proliferation of illicit economic activities under Petro. This will affect risk perceptions for the private sector and attract the scrutiny of regulators and law enforcement officials investigating drug trafficking, money laundering and corruption.

Colombia’s time as a secondary concern for the Trump administration may be coming to an end.