Brazil’s soluble coffee sector launches new push to avoid U.S. tariff hike

The instant coffee production sector has presented new arguments to the Brazilian government to use as “ammunition” in negotiations with the United States to remove the 40% tariffs. The product was one of the few that did not receive an exemption from President Donald Trump last week and remains subject to the surcharge.

The Director of Institutional Relations at the Brazilian Association of the Soluble Coffee Industry (Abics), Aguinaldo Lima, met on Tuesday (11/24) with Vice President Geraldo Alckmin and Agriculture Minister Carlos Fávaro to discuss strategies for negotiating an exemption for Brazilian products from tariffs on shipments to the U.S. The entity’s suggestion was to eliminate the 17% import tariff on foreign soluble coffee as a demonstration that Brazil is seeking equal treatment in the global market.

“So we suggested removing the 17% tariff that Brazil charges on imported soluble coffee. It is an interesting countermeasure that aligns with what we are requesting: eliminating the tariff. It applies here as well,” he told journalists after the meeting at the Ministry of Development, Industry, Commerce, and Services.

Brazil imports minimal volumes of soluble coffee from the United States, Lima emphasized, but the measure is a signal of balance to advance negotiations. Earlier this year, due to inflation, the government reduced import tariffs on several food products, but maintained the rate for soluble coffee — a decision the sector did not understand. Since January, only 234 tonnes of the product have been imported, in transactions totaling US$4.7 million. The main exporters were Spain (140.7 tonnes), the United Kingdom (38 tonnes), and South Korea (24.8 tonnes). Imports from the U.S. totaled 4.5 tonnes, according to Agrostat data from the Ministry of Agriculture.

According to him, Alckmin liked the suggestion. “The Vice President already pointed this out in red here. This is ammunition for our negotiators, so that they can negotiate the negotiations,” he said.

With the tariff hike, the U.S. ceased to be the main market for Brazilian soluble coffee for the first time in 60 years. In October, Russia became the top destination for shipments. Brazil exported 71 thousand tonnes of the product from January to October, of which 13.1 thousand went to the American market. The Russians imported 5.5 thousand tonnes.

Lima said he remains hopeful for the exemption. “The situation becomes more critical every day. Our product is sold to major American brands and ends up on store shelves. If you begin disappearing from shelves, what replaces you? Other products. So every day is a threat to our performance in the United States, which has been our main market for 60 years,” the director added.

The information collected in the meeting will be immediately passed on to negotiators, Alckmin told coffee sector representatives. In addition to Abics, members of the National Coffee Council (CNC), the Brazilian Coffee Exporters Council (Cecafé), and the Brazilian Specialty Coffee Association (BSCA) also took part in the meeting.

“Of course we were expecting a more political and more institutional meeting, but we know it will not be only about soluble coffee. Other products will have to be included in this package of negotiations. We remain very hopeful and highly coordinated,” he concluded.

Agriculture Minister Carlos Fávaro said that Abics’ proposal is interesting and adds a new element to negotiations. “The coffee sector has made great progress, but soluble coffee was left behind. We are committed to working together. They will seek support from their counterparts abroad — the companies that buy Brazilian coffee — and we will put the issue on the table to resolve it,” he told the press after the meetings. According to him, the product will be brought to the negotiation table “within Brazil’s priorities.”

Fávaro and Alckmin also received representatives of the Brazilian Association of Nuts, Chestnuts and Dried Fruits (ABNC) and the Brazilian Association of Meat Exporting Industries (Abiec) for meetings about the tariff increase. Nuts and beef were fully removed from the U.S. surcharge lists last week. “These meetings were more to express gratitude,” Fávaro said.

Vice President Geraldo Alckmin and representatives of the other sectors did not speak to the press.

Source: Globo Rural

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