New US tax policy skews global coffee flows

Coffee harvest. (Photo: Vu Sinh/VNA)

However, Brazil - the world's largest coffee producer - will suffer because its coffee is still subject to high tariffs.

The United States will eliminate import tariffs on coffee beans from nearly all producing countries, the announcement said late last week. The 10 percent reciprocal tariff imposed on Brazil will be eliminated, while the additional 40 percent tariff will remain in place.

Analysts and coffee industry representatives said on November 17 that the change would prompt the United States, the world’s largest coffee consumer, to increase purchases of coffee beans from Asia and Latin America, while limiting imports from Brazil. “Prices will regulate trade flows,” said Judith Ganes, president of J. Ganes Consulting and an agricultural commodities analyst.

Most coffee-producing countries in the Americas, except Brazil, were previously subject to a 10% tariff that has now been eliminated. Asian countries that were subject to higher tariffs have also been exempted, meaning they can supply coffee to the US duty-free. This has provided some breathing room for US coffee supplies, but with a 40% tariff on Brazil, things will still be tough for the South American country.

Brazil - which once supplied a third of the coffee beans to the US market - is still negotiating a separate deal.

“These changes distort the market and further reduce our competitiveness,” said Marcos Matos, director of the Brazilian Coffee Exporters Association (Cecafe).

Exports of specialty coffee to the United States have dropped 55% in the past three months since the tariffs were imposed, according to Luiz Saldanha, vice president of the Brazilian Specialty Coffee Association. He warned that the situation could worsen in the coming time.

Source: https://vtv.vn/chinh-sach-thue-moi-cua-my-lam-lech-dong-chay-ca-phe-toan-cau-100251118142958127.htm