US Tariffs on Brazilian Instant Coffee Could Harm Consumers and Businesses, Industry Warns

A proposed 25% U.S. tariff on instant coffee from Brazil threatens to increase costs for American companies and consumers, according to the Brazilian Soluble Coffee Industry Association (Abics). The industry group argues that since the U.S. relies heavily on imports for the product, any additional duties will disrupt supplies and ultimately be passed on to shoppers. "By imposing additional tariffs, the first impact falls on companies and jobs, and those higher costs will ultimately be passed on to American consumers," said Aguinaldo José de Lima, Abics executive director.

Brazil is a significant supplier of instant coffee to the United States, accounting for over a fifth of the country's total imports, which amounts to approximately 15,500 metric tons each year. Conversely, the U.S. produces less than 6% of its own instant coffee, making it dependent on foreign suppliers. De Lima noted that there are currently no other suppliers capable of replacing Brazil’s volume at comparable prices.

Representatives from Abics, the Brazilian coffee exporters’ group Cecafe, and the U.S.-based National Coffee Association (NCA) voiced their concerns during recent public hearings held by the Office of the U.S. Trade Representative (USTR). The groups argued that the proposed tariff would not only raise consumer prices and squeeze business margins but also disproportionately affect lower-income households that rely on affordable coffee options.

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The proposed 25% tariff is part of a Section 301 investigation. The industry has questioned the rationale for singling out instant coffee, as other coffee products, including flavored instant coffee, have been exempted from similar duties. The warning comes as instant coffee has seen a rise in popularity in the U.S., with the NCA reporting that 11% of daily coffee drinkers now consume it, up from 6% in 2021.