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Reuters
16-07-2025
- Business
- Reuters
Traders rush to land Brazilian coffee in the US before Trump's 50% tariff
NEW YORK, July 15 (Reuters) - Commodities traders are racing against time to unload as much Brazilian coffee as possible in the United States before Trump's new 50% tariff on Brazilian products is implemented on August 1, they said on Tuesday. Newly released data showed U.S. consumer prices rose in June as the cost of the Trump administration's tariffs began to be passed on, including to cups of coffee. Some traders are diverting vessels mid-journey, canceling stops in other ports so that containers filled with Brazilian coffee can enter U.S. ports without paying the 50% tariff. Others are sending some Brazil-origin coffee they have in stock in neighboring countries such as Canada or Mexico, meant for use there, to the U.S. market instead. Meanwhile, U.S.-based importers are already posting wholesale listing prices that include the 50% additional charge for any shipment arriving after August 1. "We redirected some freight to land in the U.S. earlier, something that was headed to a longer journey," said Jeff Bernstein, managing director at coffee trader RGC Coffee. "But for some other cargos, we could not speed up." No workarounds are available for coffee yet to leave Brazil. Brazil produces a third of all the coffee used in the U.S., both as a single origin and as the base of most blends sold in the world's largest coffee-consuming country. The U.S. produces only around 1% of the coffee it uses. Prices for coffee in the U.S. have already risen sharply after a 70% spike in the market last year triggered by production shortages. If implemented, the new 50% tariff on imports from Brazil announced last week will cause a wave of price increases, market players say. "It is a form of taxation which is hurting American businesses. No one else. Not Brazil. Not Brazilian President Lula. This new 50% tariff is an existential threat to importers like me," said Steve Walter Thomas, chief executive of U.S.-based importer Lucatelli Coffee. Brazilian coffee co-op Expocacer, which increased its sales to the U.S. by 15% last year, said no renegotiation is possible for deals with delivery after August 1. "It is a tax imposed internally, in the importing country, so the importer is responsible to pay it and then pass it on to consumers," said Expocacer President Simao Pedro de Lima, adding that no export deals have been closed with U.S. buyers after the Trump announcement. Traders said if the tariff stands, coffee flows in the global market will be reordered, with Brazilian beans going to Europe and Asia, and the U.S. buying more from Africa, South and Central America. This change is not easy and will cost importers more, they said. One trader, who asked not to be named, said Brazilian coffee makes up a third of the blends sold by coffee chains Dunkin Donuts and Tim Hortons. He said it is also widely used by Starbucks (SBUX.O), opens new tab. The three companies did not return requests for comment. The U.S. National Coffee Association declined to comment on the tariff, but said "coffee is a fixture in Americans' daily lives and the U.S. economy," noting that two-thirds of American adults drink coffee each day. The association has asked the Trump administration to exempt coffee from the tariffs on Brazil.
New Straits Times
16-07-2025
- Business
- New Straits Times
Traders rush to land Brazilian coffee in the US before Trump's 50pct tariff
NEW YORK: Commodities traders are racing against time to unload as much Brazilian coffee as possible in the United States before Trump's new 50 per cent tariff on Brazilian products is implemented on August 1, they said on Tuesday. Newly released data showed US consumer prices rose in June as the cost of the Trump administration's tariffs began to be passed on, including to cups of coffee. Some traders are diverting vessels mid-journey, canceling stops in other ports so that containers filled with Brazilian coffee can enter US ports without paying the 50 per cent tariff. Others are sending some Brazil-origin coffee they have in stock in neighboring countries such as Canada or Mexico, meant for use there, to the US market instead. Meanwhile, US-based importers are already posting wholesale listing prices that include the 50 per cent additional charge for any shipment arriving after August 1. "We redirected some freight to land in the US earlier, something that was headed to a longer journey," said Jeff Bernstein, managing director at coffee trader RGC Coffee. "But for some other cargos, we could not speed up." No workarounds are available for coffee yet to leave Brazil. Brazil produces a third of all the coffee used in the US, both as a single origin and as the base of most blends sold in the world's largest coffee-consuming country. The UD produces only around 1 per cent of the coffee it uses. Prices for coffee in the US have already risen sharply after a 70 per cent spike in the market last year triggered by production shortages. If implemented, the new 50 per cent tariff on imports from Brazil announced last week will cause a wave of price increases, market players say. "It is a form of taxation which is hurting American businesses. No one else. Not Brazil. Not Brazilian President Lula. This new 50 per cent tariff is an existential threat to importers like me," said Steve Walter Thomas, chief executive of US-based importer Lucatelli Coffee. Brazilian coffee co-op Expocacer, which increased its sales to the US by 15 per cent last year, said no renegotiation is possible for deals with delivery after August 1. "It is a tax imposed internally, in the importing country, so the importer is responsible to pay it and then pass it on to consumers," said Expocacer President Simao Pedro de Lima, adding that no export deals have been closed with US buyers after the Trump announcement. Traders said if the tariff stands, coffee flows in the global market will be reordered, with Brazilian beans going to Europe and Asia, and the US buying more from Africa, South and Central America. This change is not easy and will cost importers more, they said. One trader, who asked not to be named, said Brazilian coffee makes up a third of the blends sold by coffee chains Dunkin Donuts and Tim Hortons. He said it is also widely used by Starbucks. The three companies did not return requests for comment. The US National Coffee Association declined to comment on the tariff, but said "coffee is a fixture in Americans' daily lives and the US economy," noting that two-thirds of American adults drink coffee each day. The association has asked the Trump administration to exempt coffee from the tariffs on Brazil.
Reuters
12-03-2025
- Business
- Reuters
North America coffee industry seeks answers amid trade war
NEW YORK, March 12 (Reuters) - North American coffee market participants are seeking clarity on how the trade war started by the administration of U.S. President Donald Trump impacts their businesses across the region, where operations are highly interconnected. Companies have roasting, packaging and trading bases in both the United States and Canada in order to better supply clients. Potential U.S. tariffs and any retaliatory ones will now have to be considered when deciding what to make, and where, industry participants said. Mexico, meanwhile, is a regular supplier of high-quality green coffee to both the U.S. and Canada, as well as an exporter of instant coffee. "There are operations across the (U.S.-Canada) border for roasting and supplying retail channels, on both sides," said the CEO of one of the largest coffee companies in the region, who asked not to be named due to the sensitivity of the issue. Starbucks (SBUX.O), opens new tab, for example, roasts the coffee used in its hundreds of Canadian stores in the U.S. The company did not immediately answer a request for comment. The postponement of U.S. tariffs of 25% on the majority of goods from Canada and Mexico does not seem to have included most of the forms of coffee traded, according to documentation seen by Reuters, because the product is mostly absent from the USMCA, the free trade agreement between the U.S., Mexico and Canada. "We have added a clause in our contracts saying the buyer would pay the additional 25% tariff if it is considered due, most traders are doing that," said Jeff Bernstein, managing director of coffee trader RGC, based in Quebec, Canada. "We are exporting some coffee from Mexico to a client in Oakland (California), and he agreed with the clause," he said. Switzerland's Nestle (NESN.S), opens new tab has invested heavily in instant coffee operations in Mexico in recent years, including a program with thousands of farmers to boost production of robusta coffee, the main raw material. Nestle did not immediately respond to a request for comment. Bill Murray, president of the U.S. National Coffee Association, said coffee should be exempt from additional tariffs. "Tariffs on coffee would impact three in four Americans. Many think exports, not imports, are good for America, but unfortunately we cannot grow coffee in the U.S." There is also fear in the industry about possible U.S. tariffs on South American countries, where most imported coffee comes from. "Trump, in one of his speeches about tariffs, mentioned Brazil, although superficially. Brazil is on the radar," said Andre Acosta, director of Commodity Solutions Latam for broker Marex. Brazil is the world's largest coffee producer and exporter. Brazilian Vice President Geraldo Alckmin and U.S. Secretary of Commerce Howard Lutnick met last week and officials have started consultations on trade policy.
