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Just when you thought it was over, coffee tariffs are back in the news.
Reuters reports that Brazilian officials are trying to figure out why instant coffee is still being subject to tariffs. In November, the Trump administration rolled back tariffs on coffee, but for some reason, instant coffee still faces a 50% tariff.
The Brazilian coffee industry association is working with U.S. counterparts to convince the administration that continuing to impose tariffs on instant coffee hurts companies and consumers in both countries. “There’s nothing that could justify this attitude of maintaining tariffs on instant coffee,” the association’s executive director, Celirio Inacio, said.
Despite a 50% tariff being in place for much of the year, Brazil exported a record high of $15.6 billion worth of coffee. In the same year, Brazil exported 28% less instant coffee to the U.S.
The U.S. is by far the largest market for Brazilian-manufactured instant coffee. The increased costs due to tariffs have led U.S. importers to seek alternative suppliers, Aguinaldo Lima, executive director of the Brazilian Soluble Coffee Industry Association, told Cultivar Magazine. If the tariffs remain in place, Brazilian companies will need to seek new export markets. “This results in a loss of market share for Brazil and an urgent need to reassess market diversification strategies,” Lima said.
Read more on coffee’s instant issues here.
Photo by kelsen Fernandes on Unsplash
