U.S. roasters draw on stockpiles and reroute shipments while awaiting trade deal with Brazil

American coffee roasters are drawing down their stockpiles as they await the outcome of trade negotiations between the United States and Brazil. The deadlock could determine whether the industry will have to pay even higher prices for beans from other origins.

Brazilian coffee, which accounts for about one-third of U.S. consumption, has been virtually shut out of the American market since August, after the Trump administration imposed a 50% tariff on imports of the product. The move, which blended trade and politics, was widely seen as retaliation against Brazilian President Luiz Inácio Lula da Silva.

Trump accused Brazil’s Supreme Federal Court (STF) of unfairly targeting his political ally, former president Jair Bolsonaro — later convicted for attempting a coup d’état.

Below is a historical chart of Brazilian green coffee exports through the Port of Santos, prepared with DataLiner data:

Brazilian Green Coffee Exports via Port of Santos | Jan 2022 to Aug 2025 | TEU

Source: DataLiner (Click here to request a demo)

Tariff impact: rising prices and shrinking inventories

The import tax has already caused major losses in an industry worth around US$340 billion annually in the United States. Importers face difficulties releasing detained Brazilian shipments, roasters are paying penalties for canceled contracts, and consumers are paying up to 40% more for coffee.

Inventories in the U.S. are expected to hit their lowest level in December, putting pressure on roasters and major chains to find alternatives to maintain profit margins.

Companies redirect coffee to Canada to avoid tariffs

Some firms have turned to logistical maneuvers to minimize losses. Importer Lucatelli Coffee, for example, received roughly US$720,000 worth of Brazilian coffee after the new tariff took effect.

The shipment is being held in a bonded warehouse in Florida, where it remains tax-free until sold. To avoid the 50% tariff, part of the coffee is being rerouted to Canada — increasing transportation costs but preventing even greater losses.

“The problem is that this tariff isn’t about trade or reciprocity. It’s political, it’s personal — between Trump and Lula,” said Steven Walter Thomas, owner of Lucatelli Coffee.

Cancellations and substitutions raise roasters’ costs

Amid the uncertainty, several U.S. roasters have opted to cancel Brazilian coffee orders, paying cancellation fees of US$20 to US$25 per 60-kg bag — equivalent to about US$515 per bag without tariffs.

Downeast Coffee Roasters of Rhode Island is among the companies that canceled part of its contracts but is now sourcing more expensive beans from Colombia, Mexico, and Central America. Since the tariff announcement, prices for those coffees have risen by up to 10%, while Brazilian coffee has dropped about 5%.

“We have inventory, but it’s running out fast,” said Michael Kapos, an executive at Downeast Coffee Roasters.

Higher coffee prices add to U.S. inflation

The tariff’s effects have also reached consumers. According to the Bureau of Labor Statistics, the average retail price of roasted and ground coffee in U.S. supermarkets rose 41% year-over-year in September, reaching US$9.14 per pound.

The surge, compounded by global supply shortages caused by weather issues, has added to food inflation in the United States.

“I used to pay US$6 or US$7 — now it’s US$11, and the bag looks smaller,” said New Jersey consumer Yasmin Vazquez.

Stocks near critical levels amid hopes for a deal

U.S. coffee stocks, currently estimated at 4 million bags, could fall to 2.5-3 million by December, close to the minimum safety threshold. The country consumes about 25 million bags per year, with 8 million typically imported from Brazil.

Meanwhile, President Luiz Inácio Lula da Silva said he is optimistic about reaching a trade deal soon. Trump, however, stated: “I don’t know if anything will happen, but we’ll see.”

Until then, American consumers are likely to keep paying more for their daily cup of coffee.

Source: Portal do Agronegócio

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