On Friday, the U.S. government announced that many agricultural products would be exempt from the higher tariff rate that took effect earlier this year. This includes coffee. However, as currently reported, this does not apply to coffee from Brazil, which has been subject to a 50% tariff for the last three and a half months.
As reported CNBCthe exemption includes cocoa, bananas, certain beef products, fruits such as tomatoes, avocados, coconuts, oranges and pineapples, black and green tea, and spices such as cinnamon and nutmeg. Earlier this week, Treasury Secretary Scott Bessent announced that “significant” tariff relief was imminent, naming coffee as one of the agricultural products that would benefit. The announcement comes days after an agreement was reached with four Latin American countries: Argentina, Guatemala, El Salvador and Ecuador.
– said the Vice President of Brazil, Geraldo Alckmin that despite the announcement, Brazilian exports to the United States, which include coffee, beef and tropical fruits, are still subject to a 40% tariff. This will reduce the tariff rate from 50% on America’s leading trading partner, which historically supplies a third of all coffee to the United States, but it is not the “substantial” relief promised.
After the announcement, said National Coffee Association President and CEO Bill Murray“The NCA applauds President Trump’s actions to eliminate reciprocal tariffs on most imported coffee, which will alleviate cost-of-living pressures on the two-thirds of American adults who drink coffee daily, and will ensure a supply of coffee to U.S. companies that turn every dollar of coffee imports into $43 of U.S. economic value.”
Coffee prices have been rising steadily since the introduction of reciprocal tariffs, most notably the 50% tax imposed on Brazil. The consumer price of coffee increased by as much as 33% year over year, and the price of coffee on the futures market increased by almost 50%. This has caused significant stress across the entire coffee industry, from immense multinational corporations to modest specialty coffee and pop companies. This up-to-date exemption, while a step in the right direction, without taking into account imports of Brazilian coffee, does not provide the significant relief in question.
