By Janet H. Cho

Coffee prices are at a record high after President Donald Trump backed off a tariff threat to Colombia, one of the world's largest coffee producers. The threat came after a deportation dispute.

Colombia supplies about 30% of coffee in the U.S.

Continuous arabica coffee futures on the Intercontinental Exchange hit $3.56 a pound in Europe, The Wall Street Journal reported. The previous record was $3.48 a pound set on Dec. 10. Coffee prices haven't been this high since 1977. Arabica is the most widely grown kind of coffee.

On Sunday, Trump called for immediate 25% tariffs on Colombia after its president, Gustavo Petro, refused two repatriation flights of Colombian migrants from the U.S.

Petro objected because of what he called inhumane treatment of the migrants, who were onboard military cargo planes. He eventually agreed to all of Trump's terms to repatriate the migrants.

Later, a White House spokeswoman said the tariff orders would be "held in reserve" unless Colombia didn't carry through with the agreement.

Trump's threats rattled traders and added to worries about weather-related factors reducing the global coffee supply.

Brazil, the world's largest coffee producer, had an record number of forest fires last year, and coffee crops lost in the fires are expected to take years to recover. Vietnam, the second-largest coffee producer, has also warned of lower outputs after severe droughts.

The U.S. imported $18.5 billion in goods from Colombia in 2022, up 40% from 2021, according to the Office of the U.S. Trade Representative. The largest imports from Colombia include oil, corn, and electrical equipment and parts, according to the State Department.

Write to Janet H. Cho at janet.cho@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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January 27, 2025 15:45 ET (20:45 GMT)

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