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A 50% import tax on Brazilian coffee took effect last month, and it's hitting the world's top coffee exporter hard. Usually, the U.S. buys hundreds of millions of dollars' worth of beans from Brazil each year. Now, as prices rise, U.S. roasters are scrambling to buy more beans from other countries, including Colombia. Manuel Rueda has the story.
MANUEL RUEDA, BYLINE: Here in the Colombian city of Popayan, an auction is getting underway. Coffee roasters here are bidding for specialty beans sold in lots of 200 or 300 pounds, and dozens of farmers are urging buyers to offer higher prices.
UNIDENTIFIED FARMERS: (Chanting in Spanish).
RUEDA: One batch sells for $10.50 a pound, three times the typical price for Colombian coffee.
UNIDENTIFIED AUCTIONEER: (Speaking Spanish).
(SOUNDBITE OF GAVEL BANGING)
RUEDA: Most of the buyers here are roasters from the United States, and they haven't just come to this town in the Andes Mountains for the premium beans. They're also after standard ones for their blends.
SCOTT PETERSON: As a company, we're kind of looking at alternatives for coffee from Brazil.
RUEDA: Scott Peterson is a buyer for True Coffee, a small roaster from Wisconsin. It's his first time in Colombia.
PETERSON: Relationships are important, and we don't want to damage our relationships with Brazilian producers. We do need to look elsewhere for, you know, other possibilities.
RUEDA: For years, U.S. roasters have depended on Brazilian coffee to make many of their blends. It's relatively cheap, and it has a smooth and nutty flavor that customers appreciate. But President Trump's recent decision to slap 50% tariffs on Brazilian goods has generated chaos in coffee markets and sent roasters scrambling for alternatives.
TED STACHURA: It's unfortunate. We don't want to do it.
RUEDA: Ted Stachura works for Equator Coffees, a roaster from California. His company imported about 90,000 pounds of coffee from Brazil earlier this year, but it's suspending future purchases from that country because of the new tariffs.
STACHURA: You know, it's difficult to replace that exact flavor profile of Brazil. But as coffee professionals, that's kind of our job, to be able to finesse the components in our blends to get them to taste more or less the same.
RUEDA: Colombian goods were only hit with a 10% tariff by the Trump administration, and that's turned this country into a more attractive market for U.S. roasters.
AUSTIN CALEB: I think a lot of buyers can find a lot of diversity in all the different microregions in Colombia.
RUEDA: Austin Caleb buys for Methodical Coffee in South Carolina. His company is already replacing Brazilian beans with Colombian ones.
CALEB: We were able to find a pretty decent coffee that we're going to slowly replace our Brazil with and kind of play slow game, hoping to see if the tariffs change.
(SOUNDBITE OF BIRDS CHIRPING)
RUEDA: Colombian growers say they're also starting to see changes. Wilton Benitez runs the Paraiso farm outside Popayan. He's now sending 45,000 pounds of coffee to the United States each month - three times more than last year.
WILTON BENITEZ: (Speaking Spanish).
RUEDA: "In the short term, this will be a good opportunity to position Colombian coffee in the U.S.," he says. But all this extra demand could also drive up coffee prices in Colombia and other countries with low tariffs, and that will eventually hit the U.S. consumer.
SEAN CAPISTRANT: I think people's habits will change.
RUEDA: Sean Capistrant is a trader for Trabocca, which supplies U.S. roasters with around 4 million pounds of coffee each year.
CAPISTRANT: You'll see consumers going back to buying lower-cost coffees, making it at home to save money.
RUEDA: That pressure could ease if President Trump makes exemptions for Brazilian coffee, as he already has for Brazilian products like orange juice, gold and airplane parts.
(SOUNDBITE OF GAVEL BANGING)
UNIDENTIFIED AUCTIONEER: (Speaking Spanish).
RUEDA: Back at the fair, Austin Caleb, the roaster from South Carolina, says his company has 40,000 pounds of Brazilian coffee beans sitting in a duty-free warehouse.
CALEB: For now, the risk of, like, that warehousing fee is worth it versus the 50% increase in price for us.
RUEDA: If Trump lowers tariffs, he'll bring those beans into the U.S. If not, more Colombian coffee could be on the way.
For NPR News, I'm Manuel Rueda in Popayan.
(SOUNDBITE OF JEAN DU VOYAGE'S "KHANTI") Transcript provided by NPR, Copyright NPR.
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