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With a 50% tariff on Brazilian imports set to take effect August 1, many in the coffee industry are scrambling to find ways to keep sourcing from the world’s largest coffee producer. However, the industry received good news on July 29 when U.S. Commerce Secretary Howard Lutnick hinted at the possibility that coffee may be exempt from tariffs.
As Marcelo Teixeira reports, Lutnick told CNBC that President Trump “has agreed to set zero tariffs for those natural resources that are not grown in the U.S. in the trade deals he has closed.”
Lawmakers and the National Coffee Association have been lobbying for coffee to be exempt from tariffs, arguing that the U.S. coffee industry is 99% dependent on imports. Last week, members of the newly-formed Congressional Coffee Caucus wrote to the head of the U.S. trade agency, noting that “because there is no viable domestic substitute, tariffs on imported coffee create challenges for the industry.”
Lutnick acknowledged this in his interview with CNBC. “If you grow something and we don’t grow it, that can come in for zero,” he said. “So if we do a deal with a country that grows mangos, pineapple, then they can come in without a tariff, because coffee and cocoa will be other examples of natural resources.”
However, the agreement would apply only to countries with newly negotiated trade deals with the U.S. That would include Indonesia, the world’s fourth-largest coffee producer—but not Brazil. Still, it is the first suggestion that coffee could receive a broader tariff exemption, though that won’t help importers and roasters with Brazilian shipments arriving before the details are resolved.
Read all about the possible tariff exemptions from Reuters here.
