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MILAN – U.S. Secretary of Commerce Howard Lutnick opens up the possibility of an exemption from tariffs for commodities that cannot be produced in the U.S.- including cocoa and coffee – but it is not certain that such an exemption would apply to Brazil. Not right away, at least.
In an interview for CNBC’s talk program ‘Squawk Box’, Lutnick said President Trump has agreed to zero tariffs, for natural resources that are not grown in the U.S., in the trade deals he has closed, including the ones with Indonesia and the European Union.
“If you grow something and we don’t grow it, that can come in for zero, so if we do a deal with a country that grows mangos, pineapple, then they can come in without a tariff, because coffee and cocoa will be other examples of natural resources,” Lutnick was quoted as saying by Reuters.
“So Europe came in with cork, for example. That can come in to the U.S. without a tariff,” he said.
Lutnick however did not comment on the situation of tropical products coming from countries that still do not have a deal with the U.S., such as Brazil.
Lutnick’s (partially) reassuring statements, however, contributed to the declines recorded in the coffee futures markets yesterday, Tuesday, July 29. In New York, the contract for September delivery closed down 1.7%, at 296.50 cents.
In London, the main contract (September) lost 0.4% ending the day at $3,345.
Meanwhile, a new cold front is approaching Brazil’s main coffee-producing regions. From today until Friday 1 August, minimum temperatures could drop below 5°C, with the greatest risk of frost in Sul de Minas.
