Victoria Pacheco
Sao Paulo, July 7 — A proposed U.S. tariff of 25% on Brazilian instant coffee risks increasing costs for U.S. businesses and consumers by disrupting supplies of a product the country largely imports, the Brazilian instant coffee industry said.
According to the Brazilian Instant Coffee Association (Abics), more than 90% of Brazil’s instant coffee is destined for the United States, representing more than a fifth of the North American country’s instant coffee imports, equivalent to approximately 15,500 metric tons per year.
“The imposition of additional tariffs will primarily hit companies and jobs, and these higher costs will ultimately be passed on to American consumers,” said Aguinaldo Jose de Lima, chief executive of Abics.
The Office of the United States Trade Representative (USTR) has since proposed a new tariff of 25% on Brazilian products as part of its Section 301 investigation, while the Trump administration has separately announced additional tariffs of 12.5% on products including Brazilian instant coffee from more than 60 countries.
Representatives from Abics, Brazilian coffee exporting group Cecafe and the US-based National Coffee Association attended USTR public hearings in Washington on Monday and Tuesday, arguing that the proposed tariff “would increase consumer prices, reduce business profitability and disproportionately impact low-income households that rely on affordable coffee.”
The U.S. produces less than 6% of its own instant coffee, Lima said.
“(The US) is dependent on imports and there are currently no suppliers capable of replacing Brazilian volumes at comparable prices,” he said.
Brazilian instant coffee is currently subject to a temporary 10% global import tariff imposed by the White House after US courts struck down an earlier 50% tariff on most Brazilian goods.
Instant coffee has grown in popularity in the US, with 11% of daily coffee drinkers now consuming it, up from 6% in 2021, according to the National Coffee Association (NCA).
According to Lima, the Brazilian instant coffee industry sees no technical justification for excluding its products from the list of other types of coffee exempted from tariffs.
“All other coffee products were exempt from tax. Only instant coffee is excluded. Even flavored instant coffee is exempt, so there is no technical justification for treating instant coffee differently,” he said.
(Reporting by Victoria Pacheco; Writing by Oliver Griffin; Editing by Mark Porter)