Laotian Prime Minister Sonexay Siphandone has indicated that Laos may divert its coffee exports from the U.S. to Russia due to Trump’s 40% tariffs on Laotian goods, which could render them uncompetitive in the American market. The Prime Minister emphasized that Laos already supplies coffee to Russia and could increase these exports if U.S. tariffs make the products too expensive for the American market.
This decision comes amid broader U.S. tariffs targeting country-specific trade imbalances, with other major coffee exporters like Brazil and Vietnam also facing significant levies. Brazil, the world’s largest coffee producer, accounts for 37% of global output, while Vietnam contributes 17%. The U.S. tariffs have also hit top coffee exporters Brazil and Vietnam, with levies reaching 50% and 20%, respectively.
Coffee prices have spiked sharply in recent months due to harvests being damaged by poor weather, as well as market disruption caused by the new U.S. tariffs, according to the International Coffee Organization. Americans drink coffee more than any other beverage, with two out of three consuming it daily, according to the US National Coffee Association. The group lobbied for a exemption for coffee ahead of the Trump tariffs but so far to no avail.
The potential shift in Laotian coffee exports highlights the growing impact of U.S. trade policies on global markets. As tariffs continue to disrupt traditional trade routes, countries like Laos, Brazil, and Vietnam are exploring alternative markets to mitigate the financial damage caused by these measures. The redirection of sales to Russia could also be seen as a strategic move by Laos to diversify its trade relationships and reduce dependence on a single market.