Trump's tariffs could make coffee even more expensive

The Herald Scotland

17-07-2025

"Americans are going to feel the impact of the tariffs in their morning brew. That's a very significant tax on the leading producer of coffee," said food economist and Michigan State University professor David Ortega, adding that consumers would likely notice higher prices within months of the new tariffs going into effect.
Why are coffee prices high right now?
Tariffs threaten to add more pressure to an industry already navigating a recent price surge fueled by droughts in countries like Brazil and Vietnam. As of June, the average price of a pound of ground roast coffee cost $8.13, up from $6.25 the year prior and $4.52 in 2020, per the Bureau of Labor Statistics.
"Inventories were down, but demand is as high as ever," said Ron Kurnik, owner of Superior Coffee Roasting, a roastery in Sault Ste. Marie, Michigan.
Kurnik, 49, said a pallet of imported green coffee beans that would have cost him roughly $6,000 a year ago runs closer to $9,000 today. He said he's also facing higher packaging costs, since most of his packaging is shipped in from China, due to tariffs.
That's translated to higher prices for his customers. As of June 1, a 12-ounce bag of Superior Coffee Roasting coffee costs $13.99, up from $11.99.
Kurnik warned the nearly 17% increase may be just the first in a series of pricing changes, especially if Trump's tariffs on Brazil hold.
"About one-third of our purchasing goes to coffee from Brazil. It's definitely one of our staples," he told USA TODAY.
His roastery is far from the only business that leans heavily on imports from Brazil. About 80% of U.S. unroasted coffee imports were sourced from Latin America in 2023, according to the U.S. Department of Agriculture, with Brazil making up roughly 35% of those imports.
To keep costs low, Kurnik is looking into sourcing more coffee from alternative countries like El Salvador and Colombia. He said buying from local producers isn't an option; while Hawaii and Puerto Rico grow coffee, the quantities are too low and prices too high to completely replace imports.
"It's just going to be a really bumpy ride trying to navigate where we're buying, how much we're going to be buying," Kurnik said. But "I'm still optimistic. If you're not, you shouldn't be owning a business."
The impacts of higher coffee prices would be far-reaching in the U.S. The National Coffee Association estimates two-thirds of American adults drink coffee each day, with consumers spending nearly $110 billion on the drink each year.
Price hikes are expected to be most noticeable in grocery stores, with coffee shops seeing less of an impact. Large coffeehouse chains tend to lock in long-term contracts with a diverse array of suppliers, and the final price of a store-bought latte is influenced by far more than just the price of coffee beans.
"There's a lot more value-added that you're paying for at a coffee shop," Ortega said. "So it really depends on the type of coffee you're buying, where it's coming from."
Still, some coffeehouses' prices are going up. Kurnik said his coffee shop, Superior Cafe, hiked prices on coffee-based drinks anywhere from 25 cents to 50 cents in June.
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Other morning staples are getting more expensive
Other breakfast staples are also susceptible to higher prices in the months to come.
Orange juice prices could be pressed higher if tariff threats hold, as Brazil is a top supplier to the U.S. Plus, high demand and curbed production from record-high temperatures in Japan are driving up prices for matcha, another staple at coffee shops, according to Reuters.
Ortega said other caffeinated drinks, such as energy drinks or soda, could see a boost from higher coffee prices on the margin, but "there's really no easy substitute for a morning cup of coffee for most people."
"When it comes to our coffee culture, coffee is the predominant source of caffeine we get in the morning in the U.S.," he said.
This year's coffee prices will ultimately depend on whether tariffs hold. In June, Agriculture Secretary Brooke Rollins told the Wall Street Journal the Trump administration may consider exceptions for produce that can't easily be grown within the U.S., including coffee.