US coffee roasters are rapidly depleting their stocks while awaiting the outcome of trade talks with Brazil. The result of the talks will determine whether the industry will have to buy coffee at much higher prices in the future.
US President Donald Trump’s imposition of a 50% tariff on Brazilian coffee has shaken the $340 billion American coffee industry. This decision is seen as politically motivated punishment. As a result, importers are facing high taxes, canceled deliveries, and price increases of up to 40%.
Brazil supplies approximately one-third of the US coffee consumption. However, with this supply cut off due to the new taxes, roasters have started using the last bags of coffee in their warehouses. Stocks are expected to fall to minimal levels in December.
Some companies are trying to avoid the tax by redirecting coffee containers to Canada. However, this creates high shipping costs. Industry representatives say, “This tax is not about trade, it’s entirely political.” The impact of the taxes is not limited to importers. Large chains like Starbucks are also experiencing shrinking profit margins due to rising costs. Other suppliers are turning to Colombian and Central American sources instead of Brazilian coffee, but these alternatives are 10% more expensive. Coffee prices across the U.S. have increased by 41% in a year, averaging $9.14/lb. This increase is also fueling food inflation across the country. Brazilian President Lula da Silva said the deal could happen “faster than expected,” while Trump said, “We’ll wait and see.” Until then, coffee will remain expensive for Americans.
