Crypto News: Drugs inflame Trump-Petro ties

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Colombia is witnessing a humanitarian catastrophe as tens of thousands of people flee the country's east to escape a resurgence of guerrilla violence.

It's a setback for President Gustavo Petro's plans for lasting peace, and threatens to become another irritant in his relations with the US.

As one of Latin America's leading leftist leaders, Petro is already on the wrong side of President Donald Trump's administration. He's courted China and slammed Israel over the death toll inflicted in its war with Hamas.

US Secretary of State Marco Rubio branded him a "Hamas supporter." Petro called Rubio "an expression of the most backward sectors of American politics."

The irony is that Colombia has historically been one of Washington's biggest allies in Latin America, a major recipient of US aid and military assistance.

Those close ties are at risk as a result of the fallout from fighting that started last week when guerrillas from the Marxist ELN group went door to door with death lists in a bid to seize total control of Catatumbo, a mountainous cocaine-producing region near the Venezuelan border.

Petro had sought "total peace" via negotiations with armed groups whose main source of funding is illegal drugs. The unravelling of his plans comes as Colombian cocaine production keeps breaking records: the area of land planted with coca leaf — the raw material for the narcotic — rose 10% last year.

None of which will have escaped Washington as Trump makes a priority of stopping fentanyl from entering the US.

Colombia could potentially face decertification as a partner in the war on drugs, putting it in the same rogue category as Nicolás Maduro's Venezuela — even if the effect would be more reputational than financial.

Either way, with a cocaine glut and out-of-control narco violence, relations between Petro and Trump are set to rapidly go south.— Patricia Laya and Matthew Bristow

Displaced residents wait to cross the Tarra River, which divides Colombia and Venezuela, on Jan. 19. Photographer: Schneyder Mendoza/AFP/Getty Images

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LISTEN: On the latest Trumponomics podcast, host Stephanie Flanders unpacks Trump's transactionalism across the global economy and trade policy with Bloomberg News Editor-in Chief John Micklethwait, reporter Jenny Leonard and Bloomberg Businessweek Editor Brad Stone. Listen on Apple, Spotify, or wherever you get your podcasts.

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The Turkish Navy's IZMIT Milgem I-Class frigate. Source: STM

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Chart of the Day

Trump's decision to once again categorize the Houthi militant group in Yemen as a terrorist organization marks "the beginning of their end," according to Aidarous al-Zubaidi, the vice president of the gulf country's United Nations-recognized government. The decision will further boost the US' "momentum in the region" at a time when Iran "has become toothless," he said.

And Finally

Saudi Arabia has almost doubled poultry production in the past decade as Crown Prince Mohammed bin Salman pushes for food self-sufficiency in one of the hottest, driest places on Earth. The kingdom imports about 80% of what it eats, triggering worries about shortages in a time of rising geopolitical tensions, contagious animal diseases and stressed supply chains. It has committed more than $1 trillion to its Vision 2030 strategy to diversify the economy away from oil by nurturing industries such as tourism, automobiles and semiconductors, earmarking $4.5 billion for poultry alone.

Saudi company Tanmiah processes about 150,000 birds daily in Shaqra for fast-food outlets and supermarkets. Photographer: Maya Anwar/Bloomberg

Pop quiz (no cheating!). Which nation has offered to work with the Trump administration to take back its nationals living in the US illegally? Send your answers to balancepower@bloomberg.net