Brazilian coffee producers face a significant U.S. tariff hike starting August 1 which threatens to damage their export business while lowering domestic coffee prices. The U.S. will increase its coffee tariffs from 10% to 50% beginning August 1.
The coffee producers in Vassouras Rio de Janeiro state demand immediate action to prevent economic damage. The United States consumes the most coffee worldwide and depends on Brazil for its annual shipment of 8 million 60-kilogram bags of beans to American buyers.
The implementation of this tariff will create a Brazilian coffee surplus which will lead to price reductions according to Arabica bean exporter Thiago Garcia. The domestic market faces the risk of quick saturation unless new export markets are established according to Garcia.
The U.S. President Donald Trump declared the tariff increase as part of his strategy to force trading partners into action before the approaching deadline. The Brazilian government remains undecided about negotiations while coffee producers believe time is running out.
The world’s leading coffee exporter Brazil faces potential supply chain disruptions from U.S. trade restrictions which will create downward pressure on global coffee prices at a time when farmers face reduced profit margins and unpredictable weather patterns.
