Escalating coffee costs in Germany, as US tariffs persist on Brazilian coffee imports
In a recent analysis, Coffee Trade Analyst Judy Ganes predicts that the 50% tariff on green Brazilian coffee imports to the U.S., which came into effect in August 2025, will cause Brazil to divert its coffee exports towards other markets such as Europe and China. This shift is expected to impact the European coffee market by increasing supply pressures and potentially altering pricing dynamics.
Brazil, a significant supplier of U.S. coffee consumption, accounting for about 34%, is now seeking alternative buyers, including the European Union and China, due to the disruption caused by the tariff. While Brazil is actively expanding coffee exports to China, Europe remains a large and traditional consumer that could absorb redirected Brazilian exports.
This shift in focus may create ripple effects in the European coffee market. With increased Brazilian coffee supply, prices and sourcing dynamics among European roasters and traders could be affected. However, Ganes does not anticipate a significant drop in coffee prices in Germany, despite the increased supply.
Ganes also anticipates that U.S. President Donald Trump will soon exempt Brazilian coffee from tariffs, citing her belief in the prevailing common sense in the coffee tariff negotiations. She expects a decision regarding the tariffs in the coming days.
In the meantime, European coffee importers are expected to take up the excess supply and store it, creating a time buffer for coffee exports. The tariffs apply only to goods leaving Brazilian ports after August 6, and currently, coffee is entering the U.S. without the 50% surcharge.
It's important to note that the tariffs are not just impacting the price of coffee, but also the cost of paper cups and logo-printed thermo cups sold in coffee shops. If the tariffs persist, Ganes expects coffee prices to "explode again," given the high consumer and producer pressure due to already high coffee prices.
However, Ganes does not foresee the coffee tariffs lasting long. She told Spiegel that Trump is a tough negotiator, but she expects him to make a decision soon. In fact, Trump has already exempted orange juice from tariffs, suggesting a possible resolution for the coffee tariffs as well.
In conclusion, the U.S. tariffs on Brazilian coffee are likely to impact the European coffee market by increasing Brazilian supply volumes there and potentially shifting European market dynamics and pricing. While the exact timeline and specifics of the tariffs are yet to be determined, industry experts like Judy Ganes expect a resolution in the near future.
The tariff on green Brazilian coffee imports to the U.S. could lead Brazil to intensify its business relationships with nations like the European Union and China, thereby impacting the finance sector of the European coffee market as European importers might take up the excess supply and store it. Moreover, the tariffs might cause a ripple effect within the industry, changing pricing dynamics among European roasters and traders.
