Tag: Specialty coffee industry

Dubai, 20 August 2025 (Qahwa World) – American coffee buyers are pulling back from new deals with Brazil, the world’s largest coffee producer, after President Donald Trump’s 50% tariff on imports took effect earlier this month.

According to brokers, roasters, and exporters contacted by Bloomberg, U.S. companies are avoiding fresh contracts and looking for ways to adjust existing agreements to escape the higher levies. Some buyers are even requesting delayed shipments in the hope that tariffs might later be eased, Brazil’s exporter group Cecafé reported.

“Deals between the U.S. and Brazil have totally stalled,” said broker Thiago Cazarini. “No one’s really buying anything.”

Brazil supplies roughly one-third of America’s unroasted coffee. The tariff escalation follows Trump’s earlier April announcement of a 10% levy on Brazilian agricultural imports, which surged to 50% on August 6. The trade conflict is intertwined with Trump’s criticism of what he calls the “politically motivated persecution” of former Brazilian President Jair Bolsonaro, a close ally now facing trial over an alleged coup attempt against current President Luiz Inácio Lula da Silva.

For U.S. roasters, the tariffs pose a major challenge. Florida-based Zaza Coffee, which sources about 25% of its beans from Brazil, has 14 to 16 weeks of supply left. “Within this window maybe something can change regarding the tariffs,” said JP Juarez, Zaza’s director of coffee innovation. “But if tariffs remain, we probably won’t buy Brazilian coffee.” The company is exploring alternatives from Central America, Peru, and Mexico.

Still, for many roasters, Brazil’s dominant volumes and bean profiles are nearly irreplaceable. “Roasters have blends they want to keep consistent in any cost environment,” noted Jim Watson, analyst at Rabobank. Starbucks, for example, uses only Brazilian arabica in its blends.

With Brazil sidelined, U.S. buyers are eyeing other origins. Colombia, Vietnam, and Honduras are the next biggest suppliers, according to the Department of Agriculture. Vietnam’s robusta beans—cheaper and mostly used in instant coffee—could see imports rise to “historical highs,” according to Laleska Moda of Hedgepoint Global Markets, since tariffs there are only 20%. Indonesia and Uganda could also gain market share with lower tariffs.

Yet shortages loom. Honduran coffee is already trading 30 to 40 cents per pound above futures prices, while Colombian exporters are holding back, waiting for possible market surges, said Tomas Araujo of StoneX.

Some roasters are turning to futures markets to hedge costs. Café Aroma, a Cuban-style brand, is shifting imports toward countries with more predictable tariffs, said vice president Bernadette Gerrity.

If U.S. demand for Brazilian beans declines, those supplies will likely flow to Europe, where buyers are seeking traceable coffee to comply with new EU deforestation rules. More beans may also head to China’s expanding market, leaving U.S. roasters exposed to a more expensive supply chain, said Dave Behrends of Sucafina SA.

For some companies, the immediate hit is already being felt. Gregorys Coffee in New York received its last Brazilian shipment on August 2, just before the tariffs took effect, securing stock until mid-November. But its next shipment is already locked in at the higher rate. “Absorbing a 10% tariff is nearly impossible for a small business to do on its own,” said Daria Whalen of San Francisco’s Ritual Coffee Roasters. “Fifty percent feels staggering and insurmountable.”