- Trump’s new executive order designates coffee as an “unavailable natural resource,” eligible for exemption for future trade deals
- 50% tariffs on Brazilian coffee have already shaken the US market, and appear to be staying put
- Brazil supplies 8M bags of coffee annually to the US, but roasters and traders are pivoting fast
On September 5th President Donald J. Trump signed an executive order updating tariff rules in line with ongoing trade negotiations.
The order references an annex that matters enormously for the coffee industry: a list of products not grown in the United States in sufficient quantities – including coffee, tea and cacao – which are to be treated as “unavailable natural resources” and potentially exempt from future reciprocal tariffs; potentially being a key word here.
For a sector shaken by months of uncertainty, the signal was significant. Coffee is the lifeblood of America’s mornings – consumed by two-thirds of adults daily – and the country grows none of it at commercial scale. 50% tariffs on Brazilian coffee has thrown roasters, traders and producers into disarray. Contracts were renegotiated, blends reformulated, and some traders announced they are “exploring alternatives in the face of Brazilian tariffs,” or offered clients a “Plan B.”
“Beyond tariffs, there are still many uncertainties hovering over the Brazilian market,” says Caroline Nery, green coffee trader at Minasul – Cooperativa Agroindustrial de Varginha.
“For instance, the climate in Brazil is crucial – we depend on consistent rainfall to ensure proper flowering. Additionally, we must consider the challenges related to climate in other producing countries and also the regulatory impacts such as the EUDR. Will it be postponed again? Finally, we must think about logistics – if there are delays this can affect the cash flow of the companies. These factors can significantly influence market flows.”
The National Coffee Association (NCA), which has lobbied vigorously against such tariffs, welcomed the announcement with cautious optimism. William Murray, the NCA’s president, noted that the order provides a framework for tariffs on coffee to be reduced or removed if – and only if – countries strike deals with Washington. The designation of coffee as an “unavailable natural resource,” he argued, was an important recognition of its critical role in the US economy. But, as he warned, “the devil lurks in the details”: exemptions hinge on trade deals still being negotiated, and the order does not erase existing duties overnight.
“I would say this is both a genuine reprieve and a politically motivated gesture,” says John Moore, President & CEO at Farmer Brothers Coffee. “The practical reality is that the US produces less than 1% of the world’s coffee supply, yet we consume more than any other nation – in fact, more than the next three nations combined. The need to rely upon consistent imported supply is self-evident.”
“The NCA has done an outstanding job of representing both consumers and the coffee industry; their commitment and communications have been instrumental in getting the positive traction we’ve seen to date.There seems to be cautious optimism across the industry. The exemption for crops, such as coffee, is being interpreted as a practical acknowledgment of market realities. That said, many traders and roasters are aware that this current trade environment can shift extremely quickly.”
“While the exemption nod to coffee is welcome, most are treating it as a possible reprieve rather than a permanent resolution. The industry is watching closely to see how this plays out in future trade agreements.”
Most market stakeholders seem to have reacted with relief but not exuberance. Questions linger about how fast exemptions will be applied and whether politics could upend them again.
“Casa Brasil Coffees is a small boutique importer and roaster that has been around for 20 years – instead of being able to plan, we’re left guessing and second-guessing in an environment where the rules can flip overnight,” Joel Shuler, Owner at Casa Brasil Coffees and Little City Coffee Roasters.
“At one point we even ran scenarios about moving roasting operations across the border – but who’s to say Mexico won’t be targeted next? In the short term, like everyone else, we’re keeping purchases and investments to a minimum to avoid being stuck holding inventory with substantially higher costs overnight. In the long run, it’s American consumers who will pay the price, as producing countries like Brazil will simply find other markets for their coffee.”
The credibility gap
The order also creates an awkward dilemma for the coffee trade.
Over the past two months, several US roasters and traders had disclosed that they would reduce reliance on Brazilian coffee, long the backbone of many blends, to avoid exposure to tariffs. Alternative strategies included shifting to other origins like for example Peru, Honduras, Mexico, and Ethiopia, and open communication and problem-solving with Brazilian producers.
“Right now, roasters in the US face extraordinary volatility in the commodity markets, the differentials per origin, and the tariffs,” says John. “Recent uncertainty has led some roasters, including ours, to diversify sourcing and prioritise more flexible procurement strategies. The exemption is a step in the right direction, but consistency in policy will be key to fully restoring confidence.”
If the new Executive Order suggests at first glance that move may have been premature, the reality is more nuanced. Coffee is not universally exempt from tariffs; rather, the administration has signalled it could be included in future trade negotiations on a case-by-case basis, without offering any firm commitment. Without a trade framework in place for negotiation, it seems that the reprieve will not apply to Brazil.
“The exemption certainly helps to begin to restore confidence, especially for long-term contracts and planning,” says John. “We, however, are yet to see an official trade deal with Brazil emerge that would include coffee as exempt. In fact the only major coffee producing countries with current framework deals are Vietnam and Indonesia.”
If tariffs on Brazilian coffee do end up being rolled back, Brazil once again becomes the cheapest, most reliable arabica supplier: available in vast volume, neutral in profile, and indispensable for blend consistency. While the episode may have already left a scar, Brazil remains strong in its position as global coffee exporter.
“There has been an impact already, but it’s important to highlight that trust in a supplier is not built or lost in a single episode,” says Caroline. “Brazil remains the world’s largest producer and exporter of coffee, with a robust structure and a long-term commitment to the market.”
But after decades of building trust with US buyers, the speed with which roasters signalled substitution raises questions: will relationships reset smoothly, or will Brazil start prioritising other markets less prone to tariff drama, such as Europe or Asia?
“This was never about trust in Brazil,” says Joel. “The real issue is that trust in the stability and integrity of US policy has been shattered. When the White House justifies 50% tariffs on Brazil with an order titled ‘Addressing Threats to the United States by the Government of Brazil’ – arguing that Brazil’s actions pose an economic threat to the US, undermine its policies on free speech and fair elections, and breach basic human rights, while at the same time maintaining lower tariffs on countries like China, it lays bare the absurdity and arbitrariness of the process.”
“What’s being undermined is not Brazil’s reputation as a supplier, but America’s reputation as a dependable trading partner. Brazil will keep selling its coffee elsewhere; the real damage is to the US. Roasters, traders, and consumers can no longer count on stability, and credibility has been shaken. In the end, Americans will pay the price as their affordable luxury grows less affordable.”
The US imports around 8M bags of Brazilian green coffee annually; losing even a fraction of that share would sting. The bigger issue is uncertainty: if every few years trade rules are rewritten at short notice, long-term commitments between producer and buyer become harder to sustain.
“Brazil remains a cornerstone of global coffee supply, and its importance to US roasters has historically been unparalleled,” says John. “Consumers value consistency in their coffee flavour profiles, and roasters are very sensitive to these preferences. Changing components must be a deliberate, thoughtful and intentional process that always keeps the consumer demands at the forefront.”
Cooperatives and boutique to mid-sized exporters, who lack the hedging depth of global trading houses, find themselves carrying the brunt of volatility.
When roasters scramble to rebalance blends, the pain often trickles down to producers, who face shifting demand and pricing. The new executive order may calm nerves in the short run, but it does little to erase the sense of vulnerability.
Relief, with conditions
For now, the practical effect of the order is limited. Coffee is eligible for exemption, but only if trade partners sign agreements with the US administration.
The executive order may soothe fears of immediate disruption, but it also signals a deeper shift in how American decision-makers think about commodities the US cannot grow – or in sufficient amount.
By codifying coffee, tea and cocoa – amongst many others – as “unavailable natural resources,” the White House has effectively drawn a line between imports considered expendable and those deemed essential. That distinction matters not only for traders but also for producer countries, which can now frame tariff negotiations around the indispensability of their exports.
“On one hand, recognising coffee as an ‘unavailable natural resource’ aligns with economic logic – there’s no viable domestic substitute at scale,” says John. “That classification provides a strong foundation for excluding coffee from future tariff regimes.”
“On the other hand, in any trade negotiation, high-volume imports, such as coffee, can become leverage points. While the codification helps reduce some immediate risk, it doesn’t eliminate the possibility that coffee could be revisited in future talks. For companies, such as ours, the best strategy is to stay engaged with policymakers and maintain diversified sourcing to manage that risk.”
Relief is not guaranteed. Exemptions hinge on bilateral deals, and America’s trade partners may be asked to make concessions in other sectors. Earlier this month, Washington hosted a public hearing on the Section 301 investigation into Brazil’s trade practices. William Murray of the NCA and Marcos Antonio Matos, CEO of Cecafé, warned that 50% tariffs on Brazilian coffee would hurt not only the industry but the wider American economy. By contrast, Ricardo Freire Vasconcellos of Brazil’s Conservative Congress defended the US’s sovereign right to impose such measures, arguing that President Lula’s pivot toward closer trade ties with China – in contrast to Bolsonaro’s pro-US stance – has inflicted “damage” on American commercial interests.
“Although trade policy decisions are beyond the control of producers, Brazilian coffee has been preparing through diversification, innovation, and sustainability,” says Caroline. “Investments in technology, climate adaptation, and new markets are strengthening the sector’s resilience and ensuring Brazil’s leadership, even if coffee is eventually used in trade negotiations.”
For the industry, the lesson is sobering. Even with the exemption framework, roasters cannot assume stability. Tariffs have shown how political whims can alter economics overnight, undermining long-term contracts and denting trust between producers and buyers. That fragility could accelerate consolidation, as only the largest firms can hedge risks, diversify origins, and absorb shocks.
Consumers, too, should not expect immunity. If trade policy turns coffee into a bargaining chip, price volatility will remain a feature. The executive order acknowledges coffee’s special status, but it also exposes the paradox of globalisation: a crop America cannot live without is also one it cannot control.
Coffee Intelligence
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