This morning, the coffee in the cups of hundreds of millions of Americans is, in a sense, a small wonder. It becomes possible due to the efforts of a long – linked chain of various actors.
The chain commences with coffee farmers. According to frequently – cited 2018 data from Enveritas, around 95% of these farmers are smallholders, operating on five hectares of land or less. They are accountable for producing roughly 60% of the world’s coffee.
USDA statistics show that less than half of 1% of these farmers are in the United States or its territories, namely Hawaii and Puerto Rico. Together, these two places contribute less than 1% of the world’s coffee output.
As the world’s largest coffee consumer, the United States has depended on countries within the so – called “coffee belt” to supply its green coffee. This dependence has two aspects. Firstly, coffee demands specific climate, elevation, and soil conditions, which are prevalent in many tropical countries for growth. Secondly, the lower production costs in poorer and/or developing countries offer U.S. green coffee traders and roasters a cost – edge.
In essence, ever since the start of commercialization, the entire U.S. coffee industry has relied on coffee farmers to keep prices down, ensure a stable supply, expand product offerings, and provide U.S. consumers with a wide array of inexpensive and delicious coffee options, all while making a profit.
This basic trade dynamic has numerous side – effects, both positive and negative. A prominent one, however, is the poverty among millions of smallholder coffee farmers. An Enveritas estimate in 2018 stated that 44% of the world’s smallholder coffee farmers were living in poverty, with 22% in extreme poverty, based on the World Bank’s benchmarks at that time.
Without delving too deeply into U.S. national politics, last week, the U.S. federal government initiated a trade war with many parts of the world. New tariffs were targeted at 15 out of the world’s 20 largest coffee – producing countries. These new tariffs range from 10% to 46% and impact the world’s four biggest coffee – producing countries – Brazil, Vietnam, Colombia, and Indonesia – along with key U.S. trading partners in Latin America, Africa, and other Asian regions.
President Donald Trump claimed that these tariffs were a response to trade relations that had been “taking advantage of us” for decades and were intended to affect nations “that treat us poorly.”
“For decades, our country has been exploited, plundered, and taken advantage of by nations both near and far, friends and foes alike,” Trump said on the White House lawn last week.
Regardless of what one may think about aluminum manufacturing or Gulf shrimping, in the context of coffee, the idea that the U.S. coffee industry has been a victim of trade exploitation is completely absurd.
Certainly, these “reciprocal tariffs” are not exclusive to coffee. They aim to bring about broader changes in global trade and U.S. manufacturing. (Presumably, someone at “Daily Mango News” is writing a similar piece right now.)
Regrettably, for everyone involved in the U.S. coffee supply chain – from coffee shops, roasters, and U.S. traders to exporters, producer groups, and farmers in tariff – affected countries – coffee seems to be a major casualty in a war that few desired.
Since last week’s tariff announcement, much of the discussion in the U.S. coffee industry has been solely focused on prices, which were already a concern due to recent C market fluctuations.
However, there might be something even more crucial at stake – something related to reputation. In the coffee realm, the U.S. doesn’t fit the “victim” role very well.
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