Murray clearly stated: "The issue with coffee at present is not about whether the bilateral trade is fair or whether it falls within the scope of mutually beneficial products, but rather the issue that coffee is a domestic necessity (given the country's scarce production), this brown-colored finished bean drives the development of the U.S. economy, supports nearly 2.2 million domestic jobs, and provides recognized health benefits, while also providing a strong driving force for our consumers in daily life." The U.S. Trade Representative's Office launched the digital part of an investigation into Brazil's alleged trade imbalance on July 17. The investigation, authorized under Section 301 of the Trade Act of 1974, targets multiple areas of the Brazilian economy including ethanol infusion, the popular shopping center on 25th Street, major tech companies, the Pix payment platform, and illegal deforestation. However, all these issues are unrelated to the current 50% additional tariff: it is implemented based on an executive order issued by the U.S. President under the authority of the National Economic Emergency Act. The White House's emergency decision to exempt additional tariffs on nearly 700 Brazilian goods does not include coffee, as it is believed to have multiple sources. Currently, there is no plan for trade negotiations on coffee between the two countries, as the Trump administration's condition for initiating dialogue is the withdrawal of legal actions against its supporter Bolsonaro. The Brazilian government claims that the case falls within the scope of national sovereignty and cannot be interfered with or violated by external parties.
Murray pointed out that the Brazilian government has started to increase coffee exports to China. Recently, Beijing has approved the entry qualifications of over 180 Brazilian exporters to the Chinese market, and Murray emphasized this information to the U.S. Murray believes that, in addition to the direct supply issue, the tariff also threatens the entire U.S. industry due to the tariff inversion phenomenon, "where the tax rate on raw materials is higher than the tax rate on the finished products made from those materials." Murray is deeply concerned and pointed out that coffee roasters in third markets could completely process raw coffee beans from Brazil, which are inexpensive, and then export the roasted coffee blends to the U.S. at much lower prices than U.S. roasters, thereby undermining the core competitiveness of U.S. roasters.