Coffee prices rise as US imposes tariffs on Brazil
Coffee has not yet been excluded from the 50% tariff, raising the prospect that trade between the world's largest coffee producer and the top consumer of the commodity could be severely disrupted. Brazil's coffee exporters said in a statement they would continue to push for exemptions. The new tariffs come into effect August 6, not on Friday as originally planned.
'Another week until 50% comes into effect. Most (sector participants are) still hoping for a general coffee exclusion. I think it's unlikely,' said a Europe-based trader at a top global coffee trade house. Prices are expected to rise in the short term if a 50% tariff is imposed, with a scramble for stocks and a major upheaval in global trade flows likely as supplies are redirected to new destinations. In the longer term, however, tariffs are set to weigh on world coffee prices as they would likely hurt demand in top consumer the US by boosting the country's already inflated coffee prices.
The US is almost entirely reliant on coffee imports with the quantities grown in Hawaii and Puerto Rico accounting for less than 1% of its consumption.
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Express Tribune
15 minutes ago
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Recalibrating economic diplomacy
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These sectors are particularly vulnerable to shifts in international market access and the trade deal ensures they keep a foothold in a critical market. The United States accounts for more than 18% of Pakistan's total exports, with textile forming the largest share. According to the Pakistan Bureau of Statistics and Comtrade data, Pakistan's exports to the US totaled $6.8 billion in 2024, where garments, home textiles and Basmati rice dominated the basket. Without the tariff deal, these exports would have suffered a blow to competitiveness amid rising global trade friction and a high-cost domestic environment. While the 19% tariff is lower than the expected punitive rate, it remains significant and still puts Pakistani goods at a disadvantage compared to nations with free trade arrangements. 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Development of indigenous resources could reduce the oil import bill, which has hovered around $16-18 billion annually, according to the State Bank of Pakistan's (SBP) balance of payments reports. However, the actual scale and viability of these reserves remain uncertain, with decades-old geological surveys offering mixed assessments. Operationalising such projects would also require massive infrastructure, political stability in energy-rich provinces like Balochistan and a long-term framework for investor protection where Pakistan has historically underperformed. The trade deal and broader foreign inflows have helped boost foreign reserves in the near term. SBP data showed reserves at $17.1 billion in late July 2025, a notable improvement from the $11.7 billion recorded in early June. This level, while modest, provides coverage for roughly two months' worth of imports, a widely accepted threshold for external stability in emerging markets. 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an hour ago
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