Trump’s Tariffs Could Lead to Higher Coffee Prices in the US

Americans may be hit with another price hike on coffee. With supply chain issues and climate change affecting bean production, importers and roasters now have to deal with tariffs on goods from some of the largest coffee-supplying countries in the world.

Earlier this week, the Trump Administration announced a 46% tariff on Vietnamese imports. Vietnam is the world’s second largest coffee supplier and the third largest for the U.S. Vietnam is a major exporter of robusta beans, which are often used in instant coffee and ready-to-drink cold beverages.

“Vietnam is the big one that sticks out,” said StoneX broker Tomas Araujo, per Reuters. “Going forward, it will be a challenge for the supply chain and to end users, with added costs.”

According to a European trader, the tariff in place for Vietnam goods will raise the price for a ton of coffee by $2,500. It is unclear whether the tariffs will affect beans already in shipment to the U.S.

Products coming in from Indonesia, the fourth largest grower of beans globally, are subject to a 32% duty. Central and South America, which are also major producers of coffee, are facing a 10% tariff on goods imported into the U.S.

Buying Coffee From Brazil

U.S. importers may shift buying from Vietnam to Brazil. However, the South American country does not grow as much robusta as Vietnam, so it’s hard to say how this will affect the end products. Brazil is more known for growing a milder, arabica bean.

The U.S. will have to compete in the Brazilian market for its limited robusta bean. Meanwhile, without strong competition from the U.S., Europe and China will likely get better deals on robusta beans from Vietnam, as the price will likely fall with less demand.

It’s not just coffee, either. Cocoa beans used in the production of chocolate could see a rise in price for U.S. importers. Ivory Coast, one of the top suppliers of cocoa beans in the world, faces a 21% tariff on goods.

“Both the coffee industry and candy manufacturers will lobby hard to have the tariffs removed from these products,” said the president of J Ganes Consulting, Judith Ganes, as reported by Reuters. “I personally doubt the tariffs will stick.”