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Hold the Joe, Joe. Donald Trump’s unpleasant tariff this week in Brazil was enough to make any American coffee drinker feared he has reached the decaffeinated by mistake. South American power is its largest bean supplier. Swallow, in fact. But European caffeine addicts should also worry about the price of their solution.
The coffee futures shook on Thursday after the president of the United States threatened with 50 percent tariffs in Brazilian products. In doing so, he launched what he called a “witch hunt” against the former president of Brazil, Jair Bolsonaro, in trial for an alleged plot of blows. While Trump’s actions are rarely predictable, this is particularly disconcerting: the United States directs a commercial surplus with Brazil, not a deficit.
However, market prices in New York soon retreated, since merchants opted for the probability of another taco scenario: Trump is always chicken. After all, the president and his advisors can fearly fear voters to bother if the cost of their jumps. To touch specific products, or give them lower levies, has become a common pattern in the last three months.
But this price increase, and a pointed response from the current Brazilian president, Luiz Inacio Lula da Silva, occurs when coffee prices have recently decreased record levels after several poor crops. Nestlé’s executive president, Laurent Freixe, recently described price increases as “unprecedented.”
It is Europe, not the United States, where drinkers have the heaviest habit. The region, with 450 million people, passes through 54 mn of 60 kg of coffee beans a year, according to figures from the International Coffee Organization, while the 380mn living in the US. UU. And Canada consume 31 mn. The sums of cups per capita depend largely on the type of coffee drinker: the fans of the little espressos in the style of the Italian cafeteria are rarely consumers of the Venti Brew Brew cubes of Starbucks.
A US BRAZIL BROUHA. UU. It could cause prices. That might not be bad for other countries: if the largest producer and exporter in the world meets the unveiled beans due to the US. The same goes for Vietnam and Indonesia, both great producers face strong white house tariffs. But volatility is useless, especially because executives in consumer companies respond to uncertainty when trying to push the highest prices.
Time also matters. Almost the entire blow of coffee price increases reaches final consumers in just eight months, according to the estimates of the United Nations. That is a lifetime to a caffeine addict, but it means that current additions could land in the turns of consumers just in time for the 2026 elections in the middle of the US period. Taco with your capuchino?
jennifer.hughes@ft.com
