In recent weeks, we have witnessed an escalation of tariff tensions imposed by President Donald Trump on both allies and adversaries of the United States around the world.
Among the fifteen largest producers of robusta and arabica coffee, more than half have faced some form of tariff increase. Meanwhile, among the fifteen largest consumers—mostly European countries and U.S. allies—absolutely all have seen their tariffs rise.
At a time when global coffee stocks are at historically low levels and consumption remains relatively resilient to price increases, one may ask: who will emerge as the big winners and losers from these new trade measures? For Brazilian producers, the concern right now is quite practical—how to sell their freshly harvested crop in this shifting landscape.
The Losers: Non-Producing Countries and Their Consumers
The main losers under this new tariff regime are likely to be companies and consumers in non-coffee-producing countries. Many of these companies are already working with minimal inventories due to higher interest rates in importing countries and rising prices caused by recent poor harvests.
This situation has squeezed profit margins, forcing companies either to absorb losses or to pass higher prices on to end consumers. It is worth noting that a significant portion of coffee exports occurs within multinational corporations themselves—where the exporting and importing entities belong to the same conglomerate.
The Winner: China’s Strategic Position
On the winning side, one country stands out above all others: China.
Because of this combination of factors, China has a historic opportunity—to move beyond being merely a promising emerging market and become a central player in the global coffee trade, with substantial control over stock levels and pricing power.
Even if domestic coffee consumption remains low, a country can still play a major role in the market by buying and selling contracts and influencing global prices according to its own strategic interests.
Just this year, the Chinese government allocated over US$24 billion to stockpile grains, edible oils, and other food commodities. The idea behind this policy is to build reserves of essential products that China does not produce domestically, thereby reducing its dependence on countries like the United States, Brazil, and members of the European Union.
Although it remains unclear whether coffee is part of this broader stockpiling strategy, the move signals Beijing’s intent to assert greater control over key agricultural commodities.
Brazil-China Trade Relations Strengthened
Recently, China approved the registration of several Brazilian coffee exporters to facilitate trade with the country. While this does not guarantee increased sales, it simplifies export procedures and helps streamline trade flows. Chinese coffee imports hit record highs through 2023, before easing slightly the following year.
In the broader Southeast Asian context, several major coffee-producing nations also possess large populations that, so far, consume relatively little coffee—mainly due to cultural and financial reasons. However, with lower domestic prices, local consumers could be encouraged to shift gradually from tea to coffee.
This trend could also boost intra-regional trade within the Association of Southeast Asian Nations (ASEAN), which includes two major producers—Indonesia and Vietnam—a significant consumer, the Philippines—and a total population of 670 million people, three times larger than Brazil’s.
A Reversal of U.S. Trade Strategy
If President Trump’s trade strategy aimed to distance Brazil from China and hurt Brazilian exporters, the timing may have backfired. Coffee and food stocks in the United States are currently at historic lows, which could drive up prices and fuel inflation in the short term.
Moreover, this policy could inadvertently enhance China’s role in markets where the U.S. once held dominance—reducing American leverage and access to vital raw materials.
In short, the shifting dynamics of global trade and stockpiling policies suggest a new reality: China is no longer just a potential consumer market—it is emerging as a guarantor and power broker in the international coffee industry.
