HI Robert, yes indeed we have some new tariffs here in Ecuador that went into effect last week. I have written about them for this month’s Ecuador Insider not, which should hit your email in-box any day now. New tariffs of 5% to 45% are being added to goods being imported into the country. These include tires and automotive parts, furniture, imported food items… anything, essentially, produced outside the country. Real estate will not be affected.
And remember, this does not mean prices are increasing by 5-45%, it means the tariffs on those goods are increasing. So, say something costs $12 right now and that includes a $2 tariff… if the tariff is raised by the ultimate amount of 45%, that means the product will now cost $12.90.
The government is doing this to stimulate the economy in the face of vastly lower oil prices. They say these tariffs will only be in effect for the next 15 months… we shall see. There are huge demonstrations planned in Quito today in front of the presidential palace. Both sides of the issue will be represented. I expect some concessions will be made, but who knows. We’ve seen these kinds of belt-tightening measures in other countries (including the US) so as of now, there doesn’t seem to be much cause for concern just yet, although importers and shopkeepers are, as you might imagine, concerned.
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