The Office of the United States Trade Representative (USTR) has confirmed that Brazilian instant coffee will be exempt from a proposed 25% tariff on a wide range of imports from the country. The decision, announced in mid-July, reverses an earlier proposal that could have included coffee products under a Section 301 investigation into Brazil's trade practices.
The exemption is a significant development for Brazil, one of the largest exporters of instant coffee to the US market. According to Cecafé, Brazil's coffee exporters' council, the decision protects between US$2.0 billion and US$2.5 billion in the nation's coffee exports. The initial tariff announcement had caused concern throughout the Brazilian coffee sector over potential impacts on trade flows and pricing.
The removal of instant coffee from the tariff list followed a period of lobbying from industry groups in both countries, including the US National Coffee Association (NCA). The NCA argued that since the US cannot produce enough coffee to meet domestic demand, such tariffs would ultimately increase costs for American businesses and consumers. The association noted that coffee is the most consumed beverage among American adults after water, and strategic exemptions are critical for the US economy.