America’s love affair with coffee hasn’t cooled – but your wallet might feel differently. Coffee prices just hit their highest level since 1997, with roasted coffee up 21.7% and instant coffee up 20.1% compared to a year ago, according to the Bureau of Labor Statistics.
Tariffs driving up import costs
The spike is being blamed mainly on a 50% tariff on coffee imports from Brazil, enacted as part of the Trump administration’s broader trade agenda. Brazil is the world’s largest coffee producer, known for high-quality, affordable beans.
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Add to that, the United States is the biggest importer of coffee in the world. The National Coffee Association indicates that at least 99% of coffee consumed in the U.S is imported.
Other coffee bean producers are also getting hit with American tariffs, including Colombia (10%) and Vietnam (20%), putting further pressure on global supply chains.
Costs passed to US consumers
The impact is being felt nationwide – from grocery store shelves to local coffee shop counters. Smucker’s, which owns Folgers, raised prices in May and August and warned that it will probably increase coffee prices again.
In New Orleans, CNN reports that “French Coffee Truck” is adding a 4% tariff surcharge on orders due to costs.
In New York, Coffee Brothers owner Dan Hunnewell told The Wall Street Journal that the price of a pound of unroasted Brazilian coffee has soared to more than $6. Hunnewell says he will absorb the increased cost for as long as possible. However, if the 50% tariff continues, he will raise prices or buy beans elsewhere, even at the cost of flavor.
In Portland, Keia Booker and Martyn Leaper, owners of a small coffee roasting business, said they had to raise prices by $2 per 12-ounce bag directly due to the tariff.
“It’s the consumer, the cafes, the roasters, the importers that are paying these tariffs, which are essentially taxes,“ Booker said.
Bottom line
In an editorial titled “A Tariff Lesson for Coffee Drinkers,” The Wall Street Journal argues that these tariffs don’t even protect a domestic industry, since coffee isn’t grown commercially in the U.S. “They are a tax on American consumption pure and simple.”
