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On 2 April, the United States (US) announced sweeping import tariffs on many of the world’s largest coffee producing countries, including Vietnam which will be subject to 46 per cent import tax.
Alongside Vietnam, there will be a 32 per cent duty on imports from Indonesia, 26 per cent duty on imports from India, 18 per cent duty on imports from Nicaragua, and a 10 per cent duty on imports for Bolivia, Brazil, Burundi, Colombia, Costa Rica, DR Congo, Ecuador, El Salvador, Ethiopia, Guatemala, Honduras, Jamaica, Kenya, Papua New Guinea, Peru, Rwanda, Tanzania, Uganda, and Yemen.
Vietnam is the world’s second largest coffee producer and the third biggest coffee supplier to the US. It mainly produces the Robusta variety.
Speaking to Reuters, StoneX broker Tomas Araujo said the import tax on Vietnam is the “one that sticks out”.
“Going forward, it will be a challenge for the supply chain and to end users, with added costs,” he said.
It is expected the US coffee industry will lobby hard to have tariffs removed from these products, but if the import taxes remain is speculated that US roasters will look to other origins to source Robusta beans, such as those countries with a 10 per cent duty.
On a post on Instagram, Cafe Imports, a global independent importer and developer of specialty green coffees based in Minnesota, encouraged its customers to write to their representatives to voice their concerns, prepare their business and customers for further price rises, and talk to their peers and suppliers in the industry.
On 3 April, world coffee prices fell as investors worried that President Donald Trump‘s tariffs would damage coffee demand in the world’s top consumer of the products. On the ICE exchange, Arabica coffee futures settled down 3.6 cents, or 0.9 per cent, at $3.8525 per pound, having earlier fallen nearly 3 per cent, while Robusta coffee futures slipped 0.2 per cent at $5,388 a ton, having earlier fallen 2.5 per cent.
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