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MILAN – Coffee futures prices fell sharply in the last session of the week, after a US Congressional initiative was announced that would exempt coffee from tariffs imposed by the Trump administration. On ICE Arabica, the coffee futures contract for December delivery lost 3.8% on Friday 19 September, closing at 366.50 cents — the lowest level in a month. On ICE Robusta, the contract for November delivery dropped by up to 7%, finishing the week at $4,135.
Meanwhile, certified stock remain low in both markets. In New York, stocks stand at just 654,224 bags, which is the lowest level in almost 17 months. In London, stocks are at 6,464 lots, equivalent to 64,640 tonnes or 1,077,333 bags.
As previously mentioned, a bipartisan bill has been introduced in the US Congress that aims to exempt US coffee imports from any tariffs.
The “No Coffee Tax Act” (click here for the full bill text), presented in Washington on Friday 19 September and signed by Representatives Don Bacon (Republican Party) and Ro Khanna (Democratic Party), aims to “bring coffee tariffs back to the level they were the day before President Trump took office. That level was 0% on everything other than coffee substitutes containing coffee,” states the press release.
First and foremost, the aim is to resolve the issue of 50% tariffs on imports from Brazil, which is the top source for U.S. coffee, providing around 8 million bags per year.
The proposal also seeks to alleviate the burden of duties levied on coffee from other origins, such as Vietnam (20%), Colombia (10%), and Indonesia (19%), which are the second, third, and fourth largest suppliers to the US, respectively.
It is important to note that the exemption would also include roasted and decaffeinated coffee, as well as coffee husks, skins, and coffee substitutes containing coffee in any proportion.
“Families across America are feeling the cost of higher coffee prices, which are already up 21%, and tariffing a product we can’t grow at a large, commercial scale, only makes it worse, said Rep. Bacon.
“I look forward to working with Rep. Khanna on this bipartisan bill and believe it can help spark the broader debate about Congress reclaiming its constitutional role in tariff policy,” he added.
The US supreme court will hear oral arguments on the legality of Donald Trump’s sweeping global tariffs on 5 November, a crucial hearing on the president’s aggressive economic agenda.
“Americans started a revolution over a tax on tea. U.S. coffee prices have increased significantly in the last year, in part due to Trump’s tariffs. If you drink coffee every morning, how can you not be mad about that? Our bipartisan bill is simple: it removes Trump’s tariffs on coffee to bring down costs,” said Rep. Khanna.
Food inflation is a sensitive issue in the United States and was hot topic in last year’s campaign.
The American shopping basket rose by 0.6% month-on-month and 2.7% year-on-year in August, according to data from the Bureau of Labour Statistics.
“Tariffs are simply a tax on American consumers, raising the price of everyday goods without creating jobs or bringing production on-shore. Article One of the Constitution makes clear that Congress has the authority to set tariffs, and this legislation begins to reclaim that authority,” Bacon also said.
The legislation faces a slim chance of passing a GOP-controlled Congress and requires Trump’s approval, but the lawmakers hope it will prompt dialogue to shift tariff policy.
When asked by the Washington Post if he was worried about angering the administration, Bacon replied: “Oh, I’m sure the administration may get a little angry about it, but I think in the end, if he takes our advice, he’ll have a better policy.”
It should be noted that, with an executive order signed on September 8, Donald Trump introduced new tariff exemptions for a range of agricultural and food products, including cocoa, coffee, bananas, and avocados. The White House explained that the measure applies to goods that cannot be grown or sourced in sufficient quantities on U.S. soil.
The measure defines specific categories of goods with zero duty, including tropical fruits such as mango, papaya, and kiwi, as well as tea, coffee, and various spices including cinnamon, turmeric, cloves, and pepper.
However, the measure only applies to partners who enter into agreements with the US and are recognized as aligned. Without this recognition, Brazilian exporters of coffee, cocoa and tropical fruits remain subject to the current regime of reciprocal tariffs.
