Brazilian Soluble Coffee Industry Association Warns of Supply Chain Disruptions and Cost Increases Over Proposed 25% Tariff on Brazilian Instant Coffee – CoffeeTalk

A proposed U.S. tariff of 25% on Brazilian instant coffee threatens to raise costs for American businesses and consumers by disrupting supply chains, according to the Brazilian Soluble Coffee Industry Association (Abics). Brazil supplies over 90% of the instant coffee consumed in the U.S., constituting more than one-fifth of the nation’s imports, which amounts to approximately 15,500 metric tons annually. Abics’ executive director, Aguinaldo José de Lima, emphasized that such additional tariffs will initially impact companies and jobs, the financial burden of which will eventually be transferred to U.S. consumers.

The Office of the U.S. Trade Representative (USTR) has suggested this tariff amidst a Section 301 investigation, while the Trump administration previously imposed an additional 12.5% tariff on goods from more than 60 countries, including Brazilian instant coffee. Collaborating organizations such as Abics, Cecafe (the Brazilian coffee exporters’ association), and the U.S.-based National Coffee Association expressed their concerns during USTR public hearings, stating that the proposed tariffs could inflate consumer prices, compress business margins, and disproportionately affect lower-income households that depend on accessible coffee.

Currently, the U.S. produces less than 6% of its instant coffee, heavily relying on Brazilian imports, with no alternative suppliers capable of meeting the demand at similar price points. Presently, a temporary 10% global import duty is imposed on Brazilian instant coffee following a legal ruling that overturned a previous 50% tariff on most Brazilian goods.

The popularity of instant coffee in the U.S. is on the rise, as highlighted by the National Coffee Association, which reported that 11% of daily coffee drinkers are now consuming instant coffee, a notable increase from 6% in 2021. Lima argues that there is little technical justification for the exclusion of instant coffee from tariff exemptions that apply to other coffee forms, including flavored instant coffee. He noted, “All other coffee products were exempted. Only instant coffee was left out.” This argument underscores a sentiment of inequity concerning the treatment of instant coffee products in tariff discussions.

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