U.S. coffee tariffs stir trouble for Brazil but opportunity for Colombia

0:01Today on State of the World, tariffs brew up big changes in the global coffee market.

0:12You're listening to State of the World from NPR, the day's most vital international stories. Up close where they're happening. It's Thursday, September 4th. I'm Christine Arismeth. Big changes are brewing in the world of coffee, and it's not good news for Brazil. Last month, the U.S. placed a 50 % import tax on coffee from Brazil, which is the world's top coffee exporter. The U.S. buys hundreds of millions of dollars worth of Brazilian beans each year. Now, as prices rise, U.S. roasters are scrambling to buy more beans from other countries, including Colombia. Manuel Rueda has the story. Here in the Colombian city of Popayán, an auction is getting underway.

1:01Coffee roasters here are bidding for specialty beans sold in lots of 200 or 300 pounds, and dozens of farmers are urging buyers to offer higher prices.

1:13One batch sells for$10.50 a pound, three times the typical price for Colombian coffee.

1:23Most of the buyers here are roasters from the United States. And they haven't just come to this town in the Andes Mountains for the premium beans. They're also after standard ones for their blends. As a company, we're kind of looking at alternatives for coffee from Brazil. Scott Peterson is a buyer for True Coffee, a small roaster from Wisconsin. It's his first time in Colombia. Relationships are important and we don't want to damage our relationships with Brazilian producers. We do need to look elsewhere for other possibilities. For years, U.S. roasters have depended on Brazilian coffee to make many of their blends.

2:01It's relatively cheap and it has a smooth and nutty flavor that customers appreciate. But President Trump's recent decision to slap 50 % tariffs on Brazilian goods has generated chaos in coffee markets and sent roasters scrambling for alternatives. It's unfortunate we don't want to do it. Ted Stachera works for Equator Coffees, a roaster from California. His company imported about 90 ,000 pounds of coffee from Brazil earlier this year, but it's suspended future purchases from that country because of the new tariffs. You know, it's difficult to replace that exact flavor profile of Brazil, but as coffee professionals, that's kind of our job to be able to finesse the components in our blends to get them to taste more or less the same.

2:48Colombian goods were only hit with a 10 % tariff by the Trump administration, and that's turned this country into a more attractive market for U.S. roasters. I think a lot of buyers can find a lot of diversity in all the different micro-regions in Colombia. Austin Caleb buys for Methodical Coffee in South Carolina. His company is already replacing Brazilian beans with Colombian ones. We were out to find a pretty decent coffee that we're going to slowly replace our Brazil with and kind of play slow game, hoping to see if the tariffs change. Colombian growers say they're also starting to see changes.

3:25Wilton Benitez runs the Paraíso farm outside Popayan. He's now sending 45 ,000 pounds of coffee to the United States each month, three times more than last year. In the short term, this will be a good opportunity to position Colombian coffee in the U.S., he says. But all this extra demand could also drive up coffee prices in Colombia and other countries with low tariffs, and that will eventually hit the U.S. consumer. I think people's habits will change. Sean Capristant is a trader for Traboka, which supplies U.S. roasters with around 4 million pounds of coffee each year. You'll see consumers going back to buying lower-cost coffees, making it home to save money.

4:08That pressure could ease if President Trump makes exemptions for Brazilian coffee, as he already has for Brazilian products like orange juice, gold, and airplane parts. Back at the fair, Austin Caleb, the roaster from South Carolina, says his company has 40 ,000 pounds of Brazilian coffee beans sitting in a duty-free warehouse. For now, the risk of that warehousing fee is worth it versus the 50 % increase in price for us. If Trump lowers tariffs, he'll bring those beans into the U.S. If not, more Colombian coffee could be on the way. For NPR News, I'm Manuel Rueda in Popayán.

4:52That's the State of the World from NPR. Thanks for listening.