Beverage market buzz: Terms of trade between markets are in flux

The past two months have made it clear that the terms of international trade could be completely rewritten. In this edition of Beverage market buzz, we look at some of the implications for beverage companies of recent international trade developments, including the new tariffs implemented by the Trump administration and the newly announced EU-Mercosur trade agreement.

US tariffs on Canada and Mexico: New US tariffs imposed on Mexico and Canada could have a significant impact, particularly on imports from the latter two countries. Beverage importers sitting on excess inventory are holding off on taking price or stocking up, hoping that tariffs will be short-lived. This wait-and-see approach will change if it becomes clear that these tariffs are more than a short-term negotiating tactic.

Tariffs and unintended consequences – the Chinese perspective: The additional 20% tariff on US imports from China will have little direct impact on Chinese or American beverage companies. There could, however, be important consequences for companies in other countries that align with either of the two major players.

Colombia: The only certainty around coffee tariffs is uncertainty: In January, the Trump administration imposed a 25% tariff on imports from Colombia in response to that country’s unwillingness to receive two planeloads of migrants. Although the two sides settled quickly and the tariff was removed, the point was made: No country is safe from tariffs. Volatility is the new reality, and it is nearly impossible to put contingency plans in place in the current environment.

North to South and East to West: In December 2024, the EU and Mercosur agreed on the terms of a free trade agreement between the two trading blocs, which is now headed for ratification. For Brazilian coffee and orange juice producers, the agreement presents an opportunity for greater access to a large, attractive market

No more halt for European malt: The EU-Mercosur free trade agreement will also create an attractive opportunity for European maltsters and barley growers to increase their access to the attractive Brazilian beer market.