The United States, as the world’s largest coffee consumer, relies heavily on coffee-producing countries in the “coffee belt” to supply its green coffees. This reliance is due to the specific climate, elevation, and soil conditions required for coffee to grow, which are found in many tropical countries. Additionally, the costs of production in poorer or developing countries give U.S. green coffee traders and roasters a cost advantage.
The U.S. coffee industry has historically benefited from the work of smallholder coffee farmers, who make up approximately 95% of coffee farmers worldwide. These farmers, operating on small plots of land, are responsible for producing around 60% of the world’s coffee. In contrast, less than one-half of 1% of coffee farmers are located in the United States or its territories, such as Hawaii and Puerto Rico, which combined account for less than 1% of the world’s coffee production.
Since the commercialization of coffee, the U.S. coffee industry has relied on coffee farmers to keep prices down, maintain a consistent supply, diversify product offerings, and provide consumers with a variety of affordable and delicious coffees. However, this trade dynamic has led to poverty among millions of smallholder coffee farmers, with an estimated 44% living in poverty and 22% in extreme poverty.
Recently, the U.S. federal government imposed new tariffs on 15 of the world’s largest coffee-producing countries, including Brazil, Vietnam, Colombia, and Indonesia. These tariffs, ranging from 10% to 46%, were implemented as part of a broader trade war initiated by President Donald Trump. The aim of these tariffs was to address what Trump referred to as unfair trade practices that have disadvantaged the United States for decades.
While these tariffs are not coffee-specific and are intended to bring about broader shifts in global trade and manufacturing, the U.S. coffee industry is facing the consequences. The focus has been on the potential impact on coffee prices, which are already a concern due to fluctuations in the C market. However, there is also a reputational risk for the United States in portraying itself as a victim in the coffee trade, given its historical reliance on coffee-producing countries.
In conclusion, the U.S. coffee industry’s position in the global coffee trade is complex, with a long history of benefiting from the labor of smallholder coffee farmers in other countries. The recent tariffs imposed by the U.S. government have added a new layer of uncertainty and potential challenges for the industry. It remains to be seen how these developments will impact the coffee supply chain and the livelihoods of coffee farmers worldwide.
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