How Would the Border Wall Affect My Coffee Importing Business?

In the world of import and export, coffee is amongst the most popular imports in the United States. It is often exported from countries such as Colombia, Guatemala, Costa Rica, and Mexico. As Americans discuss a border wall, it is important to understand how imported items from the southern border, such as coffee, may be affected. While determining the effects a wall may have on such imports, it is essential to understand that international trade finance companies may be a helpful tool to assist if issues arise as a result of this potential barrier.

What the Border Wall Would Mean for the Coffee Industry

The border wall would not be the direct issue affecting the coffee industry. However, the changes to our trade agreement with Mexico and other southern borders may be a resulting issue from the wall. This means coffee may be able to be exported from the southern border countries; however, it may take quite a bit longer to get those invoices paid. It may also affect workers on the southern border, limiting the amount of coffee being produced daily. As a result, importing coffee may become costlier. Much of this will relate to taxes imposed upon importing from foreign countries as well as the cost of labor rising.

What the Border Wall Would Mean for Your Coffee Import Business

As the coffee industry changes south of the border, the importing of coffee would change north of the border. First, you may need to import smaller quantities of coffee at a time, as production may decrease. In addition, you may find the price of coffee imports from south of the border would rise, due to import taxes and foreign business changes. As a result, your prices would likely need to increase to maintain a profit margin that is in line with your current profit margin.  As prices increase, your buyers may be slower to pay invoices.

Instead of worrying about the speed in which your buyers pay their invoices in the event of a wall, you may wish to incorporate supply chain financing to help you make payments to your supply chain on the other side of the border. The best supply chain financing companies will help your suppliers receive the necessary cash flow to continue to supply you with coffee as their costs rise and taxes increase.

The Benefits of Supply Chain Financing and Your Foreign Import Business

Supply chain financing can be a bit of an issue if you are dealing with a foreign company. When discussing coffee, it is almost guaranteed you are dealing with companies that are located in foreign countries. Coffee beans, especially quality coffee beans, do not grow on U.S. soil.

There are many benefits to working with a supply chain finance company to keep your coffee import business running smoothly and efficiently. However, you must find a company willing to finance a foreign entity. Tradewind is one of the few supply chain finance companies that has the ability and willingness to finance a foreign entity. The funding is based on creditworthiness and financial strength, as opposed to the location.

By using a supply chain financing company, the supplier is provided additional cash flow which, in turn, allows them to continue and even expand operations as needed. As a result, you can then receive more favorable payment terms, giving you a bit more time to pay your invoices, especially as taxes and overall fees may increase.

In the world of coffee, the more gourmet the coffee, the smaller the supplier. Therefore, if your import business is focused around gourmet coffee imports, having the ability to work with smaller suppliers is a key point to your business. Supply chain finance gives you this flexibility to work with both smaller and larger companies, as needed.

Final Thoughts

The idea of a border wall has caused a lot of concern and speculation for any importer doing business with companies south of the border. The issues relate to increased taxes, extended shipping times and issues, and even lack of employees on either side of the fence to help make the importing process as easy as it may have been up until this point.

Tradewind is a leading international trade finance company that offers solutions through supply chain financing that will help make the process as close to what companies have become accustomed to dealing with. By offering alternative payment options, the importing of items, such as coffee, can be seamless and continue smoothly.