Of the tens of thousands of words that make up the English lexicon, Donald Trump has one that he especially likes and for which he has declared his love in some or other interview: tariff (tariff). This weekend he reminded the Colombian president of this in a quite practical way, threatening to impose 25% rates (or even 50%) if he did not give in to the aggressive immigration policy which is promoted from the White House. Everything indicates that it will remain that way, a threat, but it serves to warm up a market that has been facing strong shocks for months. turbulence: the one with coffee.
Yes 2025 It looked complicated For lovers of morning espressos, your outlook has just become more complicated.
What has happened? That Trump has shown that, indeed, he feels a special weakness for the word “tariff.” Over the last few weeks it has announced more or less clearly that it will apply taxes on imports of China, Mexico, Canada, Europe, Denmark and even Spainalthough it is still not entirely clear whether the latter was said deliberately or as a result of a geographical ‘slip’. Curiously, it has been another country that has been on the verge of suffering tariff fury from the republican: Colombia.
Screenshot of Trump’s announcement on Truth Social.
Why’s that? For something that actually has little to do with the international market, trade balances and tax policy. The trigger has been migration. And a political fight between Washington and Bogotá. Basically, yesterday the Colombian president, Gustavo Petro, refused to allow two planes from the US loaded with deported Colombians to land in his country. What’s more, he threatened not to welcome them until Trump adopts protocols that guarantee treatment. “with dignity and respect” for immigrants.
The response of the Republican, who has managed to return to the White House after an electoral campaign that largely pivoted on a hardening of immigration policy, it did not take long to wait: through its platform Truth Social advertisement a 25% rate for the import of Colombian merchandise that would rise to 50% in a matter of days. Petro responded after a few hours with the same currencyordering a sudden increase (25%) in the tariffs that Bogotá applies to US goods.
How did the crash end? In dispatches and without reaching customs. At least for now. Despite its initial reaction, the Petro Executive ended up giving in to Washington’s demands and agreed to receive the planes with deportees. Enough so that Trump has not yet signed the economic sanctions, which have already been drafted and will be activated if his southern neighbor “does not comply” with the agreement.
“The Government of Colombia has accepted all of President Trump’s terms, including the unrestricted acceptance of all illegal aliens from Colombia returning from the US,” they boast from the White House, which reminds that Bogotá will also receive them “without limitations or delay.”
Click on the image to go to the tweet.
What does it have to do with coffee? Simple. The announcement of Trump’s tariffs and the fight between the White House and the Nariño Palace did more than shake up American diplomacy. He also put on guard various sectors Colombians who have important interests in the United States, such as oil, floriculture (which is preparing for the millionaire campaign Valentine’s Day) and coffee. Of all of them, the one more expectation generatesdue to the state of its market and price driftis the latter.
At the end of the day, Colombia is not just any country on the international coffee map. And the United States is not just another market for Colombian producers either. This double condition means that everything that affects the relationship between the two, including of course the threats of 25% tariffs or even 50%, interest (and quite a bit) to the market.
But… What does the data say? To begin with, Colombia is one of the main coffee powers on the planet. The own tables The US Department of Agriculture places it as the third largest producer, only behind Brazil and Vietnam. Other observatories leave the same drawing, like Statista. A 2024 reportThe USDA office, linked to the US Government, estimated that during the 2024/2025 campaign, Colombian coffee exports would total around 12 million GBE bags.
Colombia matters on the global coffee map. And its relationship with the United States is also important, something that is better understood with the help of a couple of figures. According to the Observatory of Economic Complexity (OEC), in 2022 Colombia exported 15.6 billion dollars to the US, of which almost 1.8 billion corresponded to coffee. This data makes it the second largest exported commodity in terms of value, only behind crude oil. The footprint of Colombia in the flow of coffee that reaches the US is also considerable.
Click on the image to go to the tweet.
But the rate would affect the US, right? The US tariff policy is that, the US tariff policy, and as warned The New York Times Yesterday, basically imposing 25% taxes on Colombian goods would mean that Americans would have to dig deeper into their pockets to buy flowers and coffee. However, if we talk about grain, what happens on the other side of the Atlantic interests us. And the reason is very simple: shocks like the one on Sunday put even more tension on a market that is already go through turbulence.
“If the US imposes a 25% tariff on all Colombian exports, the already red-hot coffee market will heat up even more. Colombia is the third largest coffee producer in the world (and a key source of rabi beans). premium)”, I was reflecting yesterday in X Javier Blas, Bloomberg columnist. In the same tweet he included a column written by himself a few days ago in which he warned of the complex panorama facing the coffee market.
And what situation is that? In Xataka we have talked already several times her. And it is summed up in a single sentence: the industry has had to deal with a complicated perfect stormmixing the effects of The Child, droughtsthe logistics crisis arising from the instability in the Red Sea, the threat of regulatory changes and the fall of stock.
The result is that the pound of arabica has reached levels not seen for a long time. more than a decade. AND the forecasts For this year they are difficult to say the least, especially as intermediaries conclude that they will not be able to assume part of the increases to cushion the rise in grain prices and, in the end, be penalized in stores.
And how does it affect prices? Blas warned it in his Bloomberg article: During this start of the year, it is likely that coffee consumers will encounter a significant increase in prices. That is the conclusion that emerges when analyzing the difference between the price of a pound of Arabica coffee at the end of the year in New York ($3.5) and the rates charged in supermarkets ($2.5), which reflects a gap between wholesalers and retailers.
For now, the graphics on C coffee futures in the US show that they have not been immune to the risk of tariffs on Colombian exports. “Arabica coffee exceeds $3.5 a pound in New York for the first time. The wholesale market is approaching the $3.5 to $4 range that many consider necessary to destroy demand,” warned Blas himself recently in X.
The fight experienced yesterday between Washington and Bogotá also raises another key question: Could Brazil, a large coffee producer, and which already has been critical with the Trump Government over how deportees from the US arrive at the Manaus airport?
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Images | Christina Rumpf (Unsplash) and Gage Skidmore (Flickr)