Arabica coffee prices reach all-time high amid tariff threats

Published 27/01/2025, 15:12
© Reuters

Investing.com -- Arabica coffee prices have reached a record level, following the retraction of tariff and sanction threats on Colombia by President Trump, the Wall Street Journal noted.

The United States sources approximately 30% of its coffee from Colombia, along with other essential food items such as bananas and avocados, and gold, according to a note from JPMorgan analysts. In 2023, U.S. imports from Colombia totaled $16.1 billion, as per Census Bureau data.

On Sunday, President Trump had threatened to impose 25% tariffs and sanctions on Colombia. This was in response to the Colombian government's refusal to allow two military planes carrying migrants to land.

However, the White House later announced that Colombia had agreed to all of Trump's terms, including the repatriation of migrants, leading to a change of course.

The White House stated that the proposed tariffs would be kept "in reserve, and not signed, unless Colombia fails to honor this agreement."

The tariff actions aimed at Colombia offer important context for commodities markets, especially in light of potential increased tariffs on Canada, Mexico, and China starting from Feb. 1, as noted by JPMorgan.

The potential tariffs on imports from these countries could significantly impact complex-wide pricing and U.S. price differentials in particular, JPMorgan added.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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