Coffee drinkers brace for record prices as tariffs hit

Telegraph

12-04-2025

Americans must brace for record-high coffee prices as Donald Trump's tariffs combine with soaring costs to punish consumers, analysts have warned.
Retail coffee prices in the US are expected to surge by nearly a third this year to an all-time high as businesses scramble to adjust to higher import charges and record high commodity prices, according to Carlos Mera, head of agricultural commodities at Rabobank.
Mr Mera said: 'I think for a large packet of coffee, we might see retail price rises of around 30pc in the 2025 calendar year.'
TJ Semanchin, owner of Wonderstate Coffee, a wholesale roasters which also owns a series of coffee shops in Wisconsin, said: 'We are in uncharted territory as an industry. The tariffs could not be coming at a worse moment in terms of impact on our prices.'
Mr Trump shocked coffee importers by imposing sweeping 'reciprocal' tariffs on America's trading partners on April 2, announcing massive charges on many key coffee exporters such as Vietnam, where he imposed a 46pc tariff.
Although he scrapped these 'reciprocal' charges on Wednesday this week, most exporting nations are now subject to a 10pc blanket tariff, which will effectively add a 10th to the import price of coffee.
This comes on top of an enormous surge in the commodity price of wholesale coffee beans.
The price of Arabica beans, America's main coffee import, has soared to an unprecedented all-time record high of more than $4 (£3) per pound in February.
It has since dropped to $3.56 but this is still up nearly 60pc year-on-year and is the highest price recorded for the beans at any point in history before 2025.
This followed years of bad harvests in Brazil and Vietnam and major shipping disruptions due to Houthi rebel attacks on ships travelling through the Red Sea.
Mr Semanchin said: 'Coffee has never been more expensive, ever. When you tack on a percentage tax on what is already a very high price, that's a multiplying effect.
'At $2 per pound, a 10pc tariff is 20 cents per pound. At a $4 market price, that tariff is now 40 cents.'
Mr Semanchin already raised his prices by 15pc to 20pc in March to account for the higher commodity prices. Now, he thinks he will have to charge an extra $1 for every $15 bag of wholesale coffee that he sells.
Mr Trump's about-turn on 'reciprocal' tariffs offers no relief for the US coffee sector, Mr Semanchin added.
He said: 'Trump's announcement has almost no impact on the tariffs we were facing. The situation for importing for companies like ours remains dire.'
Altogether, Mr Semanchin estimated tariffs will cost his business an additional $300,000 per year.
America imports almost all of its coffee apart from around 1pc which is grown in Hawaii.
This is because it does not have the appropriate climate to grow its own and means US coffee sellers have no option but to keep importing.
Bjarne Schieldrop, chief commodities analyst at SEB bank, said: 'These tariffs really do drive up the prices of goods and coffee is going to be one of them.'
Thijs Geijer, food and agriculture economist at ING bank, said US consumer coffee prices are already soaring at nearly three times the average rate of inflation.
US consumer price index (CPI) data shows coffee retailer prices in March were up by 6.7pc year-on-year, far higher than the overall 2.4pc CPI rate.
Mr Geijer said: 'Within the shopping basket of an average consumer, coffee and also chocolate are really the ones that stand out in terms of year on year price increases.'