Different from the cases of tariffs in order to solve unfair commercial behaviors or encourage domestic production, coffee is an American product must depend on the supply from the outside.
The US National Coffee Association (NCA) has called on the administration of President Donald Trump to exempt taxes for coffee items, warning that additional tax rates for Canada and Mexico can push coffee prices in the US up to 50%.
In a letter to the US Trade representative Jamieson Greer, President and CEO of NCA Bill Murray emphasized that there was no replacement for imported coffee.
He said that it is different from the case of tariffs in order to resolve unfair trade behavior or encourage domestic production, coffee is an American item depending on the supply from the outside.
NCA currently has more than 200 members, including importers, exports, transactions, brokers, roasting and retailing coffee. According to this association, the coffee industry contributes $ 343 billion per year to the US economy, with about 75% of Americans who drink coffee regularly.
The North American coffee industry has a close link between roasting, packaging and transactions in the US, Canada and Mexico. Therefore, the US additional tariffs has created great instability for the industry.
The majority of coffee is not within the duty-free range of the US-Mexico-Canada Free Trade Agreement (USMCA), which means that they may immediately get an additional 25% additional tax when this policy takes effect.
In addition, NCA also called on the US government not to impose taxes on coffee producing countries, warning that this could cause “more serious consequences”.
The US is currently the largest importing and consuming country in the world. Brazil is the largest coffee supplier for the US market, besides significant import sources from Colombia and other Central American countries, South America. The US government is currently negotiating with a number of countries in the region on this regard.
Concerns about the ability to impose taxes on coffee from South America is also one of the factors that caused the price of world coffee to increase record, with wholesale price in excess of 4 USD/pound (1 pound = 0.454kg) in February.
