STiR coffee and tea magazine

10 STiR coffee and tea / Issue 5, 2018 (October / November) NEWS Tea Spared in Escalating China/US Trade War Tea was not among the $200 billion in Chinese imports subject to a 10% US tariff announced Sept. 24 but coffee will be taxed by China in retaliation. The escalation in the trade war added to tariffs on $50 billion in goods imposed this summer. Chinese authorities responded with a $60 billion counterpunch. Coffee was listed, but the new rate was not specified. Taxes range from 15-25%. Tea Association of the USA president Peter Goggi says, "tariffs on tea are highly unlikely." "The tea growing industry in the US is not yet large enough to warrant tariff protection," Goggi explains. "While progress has been made and tea is being grown around the US, most are small and artisanal in nature and are not in any position to replace the volume of Chinese tea in our markets." China exports 724,634,383 pounds of tea last year, of which 42,744,989 came to the US. This means that in percentage terms, the US' apparent consumption of Chinese tea is 5.9% of their exports and only 0.825% of production, said Goggi, citing statistics provided by the International Tea Committee. "The tea industry is vanishingly small by the standards of both countries' economies and thus very little impact could be produced by including tea in the tariff scheme, and so we hope that tea may escape the notice of the competing interests due to its diminutive stature on the economic stage," says Aaron Vick, senior tea buyer at the The G.S. Haly Co., in Redwood City, Calif. The US maintains that China is expanding its economy unfairly by forcing US companies to hand over technology to gain access to the Chinese market. Unless China concedes, US president Donald Trump has threatened to impose tariffs on all Chinese imports, to offset a trade deficit which grew to $336 billion in 2017, according to the US trade office. "Any tariff imposed on Chinese tea would not be protective, but rather, a transparently punitive attack on a culturally iconic product that embodies Chinese national pride," said Vick. In response to critically low coffee prices, Starbucks has committed up to $20 million to temporarily relieve impacted smallholder farmers it does business with in Nicaragua, Guatemala, Mexico, and El Salvador Starbucks Pledges $20 Million Relief for Smallholders Starbucks has pledged $20 million in temporary relief for Central American coffee growers placed in financial jeopardy by depressed coffee prices. Funds will go directly to smallholders in Nicaragua, Guatemala, Mexico, and El Salvador who do business with Starbucks. These subsidies will help offset lost income until the coffee market self-corrects and rises above the cost of produc- tion, announced Starbucks. Michelle Burns, s.v.p., global coffee and tea at Starbucks, said a majority of the coffee the company buys is from smallholders. "The coffee crisis cannot be ignored. We have a role and responsibility in helping smallholder farmers sustain their livelihoods. Their success will help ensure the long-term health of coffee productivity," she said. Specialty Coffee Association executive director Ric Rhinehart said that "it will be through the strong support of the coffee industry and its leading companies, large and small, that we can set the stage for a viable coffee future, letting the farmers know their investment cost in upcoming crops will be compensated, providing them with much needed stability in the industry." Pedro Rosales Ubeda, a coffee farm owner in Villa Nueva, Nicaragua, said "With today's prices I can't invest in my farm, in fact, I can barely cover labor costs. With these prices, my farm is just not profitable." The subsidy "means I could provide better conditions to coffee pickers and their families. Also, this will allow me to invest more in my farm, be more productive and offer a better-quality coffee," he said. The sum is in addition to $50 million Starbucks provides in low-interest-rate loans. (See p54, How Far Will Prices Fall?) Coffee Shops Assist with Florence Recovery Coffee comfort was all that many shops could offer in the aftermath of devastat- ing Hurricane Florence. Hundreds of small-town cafes and coffee shops were inundated during a week of torrential rains that unleased 10 trillion gallons of rain and caused an estimated $38 billion in damage with 42 dead. Despite 90 mph winds and rain, shops in Myrtle Beach, Wilmington, and Conway, South Carolina, still managed to supply first-responders and residents with gallons of brew. Denny's, located in Spartanburg, dispatched truckloads of bacon and hot coffee to the Carolinas. The company's mobile relief diner (a semi-sized kitchen) offered free breakfast to those in need. The Convoy of Hope (www.convoy.org/response) delivered 650,000 pounds of products assisting 29,750 people with the help of 886 volunteers. Shops like the Edenton, N.C., Coffee House, which weathered the storm, set out collection boxes for clothing and food and encouraged donors to contribute to the Hurricane Florence Relief Fund in care of the American Red Cross (www.redcross.org)

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