How Tariffs Are Affecting Coffee
Remember two months ago when I wrote about the increasing costs of coffee? Whelp, things could get a whole lot worse.
In April 2025, the U.S. government implemented sweeping tariffs on imported goods, including green coffee. These tariffs, ranging from the current baseline 10%, to as high as 46% for certain countries, are poised to impact every stage of the coffee supply chain - from farmers and exporters, to roasters and consumers. I wrote this blog post to explain the implications of these tariffs and what they mean for the future of coffee and the industry at large. (Hint: farmers, importers, and roasters aren’t the one’s benefiting.)
As I currently write this, there has been a pause on all proposed tariffs, BUT, each country on the tariff list still has a baseline tax of 10%. I did my best to break down which countries are affected, how the importers are responding, WHO benefits from the tariffs, and WHO stands to lose the most.
TLDR if you don’t feel like reading this post;
Baseline tariffs are currently at 10%, this includes raw coffee. . Additional tariffs have been paused.
Tariffs are paid by American coffee importers and that cost will be passed on to roasters.
Money generated from tariffs do not go to the farmer, the importer or the roaster. They are collected by the U.S. Treasury.
Raw coffee prices will likely get more expensive as farmers, producers, freight / logistic companies, and roasters will see impacts to their overall operations from blanket tariffs applied worldwide, i.e. a shortage of freight workers due to the lack of imported goods to the U.S. due to the tariffs.
Understanding the New Tariffs
Country-specific tariffs were introduced on April 9, 2025, targeting major coffee-producing nations where I source a lot of my green coffee. Here’s a concise list the countries I source from who are affected:
Brazil, Peru, & Colombia: 10% tariff on coffee imports.
Vietnam: 46% tariff on coffee imports.
Indonesia: 32% tariff on coffee imports.
India: 26% tariff on coffee imports.
Guatemala: While specific tariffs on coffee aren't detailed, other exports like bananas face a 10% tariff, indicating potential similar tariffs on coffee.
Ethiopia, Kenya, and Zambia: These countries previously benefited from the African Growth and Opportunity Act (AGOA), which provided duty-free access to the U.S. market. However, with AGOA set to expire in September 2025 and the introduction of new tariffs, these nations could face increased tariffs on coffee exports.
Mexico: Green, unroasted coffee is considered a "USMCA-compliant good" with privileged status, meaning it is exempt from the new tariffs.
These tariffs are part of a broader trade policy shift aimed at addressing trade imbalances.
All This Comes on Top of Already High Raw Coffee Costs
Let’s not forget: coffee prices are already elevated.
U.S. Coffee C Futures have ranged from $1.80–$2.20/lb in the past 12 months — up from historic averages of $1.10–$1.40.
Climate change and radical weather has reduced yields in Brazil, Colombia, and Central America.
Labor shortages, rising input costs, and political instability are all pushing up the cost of coffee at origin.
Labor shortages are mainly affecting the harvest in that there haven’t been enough workers to harvest all the coffee cherries. For reference, harvesters make between $1-$5 per day.
Rising input costs such as water, fertilizer,
Politics have always played a factor in coffee, usually being detrimental to coffee producers whether they are directly impacted or not, i.e. Road closures in Peru and Guatemala due to worker strikes, port closures in Africa due to piracy and war, and the freezing of USAID funding where millions of dollars went to support coffee infrastructure in underdeveloped countreis
Adding tariffs into the mix creates more instability in an already stressed supply chain — meaning even without tariffs, prices were already likely to rise. With tariffs, that increase becomes more pronounced and harder to manage.
Protests in Peru over water contamination from illegal mining lead to road closures which affect how coffee get to port in Lima.
The Coffee Supply Chain and How Tariffs Affect Every Aspect of the Industry
1. Farmers
Coffee farmers are at the beginning of the supply chain. They typically receive the "farmgate" price, which is the amount they’re paid for their coffee at the farm level. This price is often a fraction of the final retail price and is influenced by various factors, including global market prices and local production costs.
With the new tariffs, demand for coffee from countries facing higher duties may decrease, leading to potential price drops at the farm level. Farmers in these regions could see reduced incomes, exacerbating existing financial challenges.
2. Exporters and Importers
Exporters handle the processing and shipment of coffee from producing countries. They sell coffee at the "Free on Board" (FOB) price, which includes costs like processing, packaging, and transportation to the port. Importers purchase coffee at the FOB price and are now subject to the new tariffs upon entry into the U.S., which factors in the “Farmgate” price plus the importer/exporters fees.
For example, an importer buying coffee at $3.00 per pound FOB from Vietnam would now pay an additional 46% tariff, increasing the cost to $4.38 per pound. This is the cost before they add on their own price increases that cover freight, logistics, staffing, and storing coffee. This significant cost increase may lead importers to seek coffee from countries with lower or no tariffs, disrupting established trade relationships. More on FOB pricing below.
3. Logistics and Freight
The logistics sector, responsible for transporting coffee from origin to destination, will also feel the impact. Higher tariffs can lead to increased costs for shipping, insurance, and customs clearance. These additional expenses may be passed down the supply chain, contributing to higher prices for roasters and consumers.
In another facet of freight, the newly imposed tariffs in other countries, such as China, will create a shortage in imported goods, which means less dock & dreyage workers, less drivers, and less warehouse staff are needed to unload and transport, AND increased costs in freight due to the lack of demand.
4. Roasters
Roasters, who transform green coffee into the roasted beans sold to consumers, will face higher input costs due to the tariffs. For instance, a specialty roaster importing 14 containers annually could see additional costs ranging from $250,000 to $300,000 due to the tariffs.
Folks I’ve spoken to in the industry are responding as such;
Increasing retail prices to maintain profit margins.
Altering blends to include more coffee from countries with lower tariffs.
Reducing other operational costs, potentially affecting quality or employment.
Impact on Consumers
Consumers are likely to experience higher prices for coffee products. With increased costs throughout the supply chain, the price of a cup of coffee at cafés and the cost of retail coffee products may rise. Some cafés have already increased drink prices by $0.50 to offset the new expenses
So… Where does the Tariff Money go?
U.S. Treasury’s General Fund
All tariff revenue goes into the General Fund of the U.S. Treasury, which is essentially the government’s main checking account. This fund is used to pay for things like:
Federal programs (healthcare, defense, education, etc.)
Interest on national debt
Public infrastructure and government operations
Important to note: The money does not go to specific industries or offset the cost of coffee — it’s pooled with all other federal revenue (like income taxes, corporate taxes, and excise taxes).
Customs & Border Protection Operations (in part)
A portion of the funds collected may be used to fund CBP operations, which include:
Border security
Port inspections
Enforcement of trade laws
However, CBP funding comes from a mix of tariff revenue and direct Congressional appropriations.
Special Cases: Retaliatory Tariffs and Trade Remedy Duties
In certain cases (e.g., anti-dumping or countervailing duties), tariff collections are earmarked or redistributed under special programs. But these do not apply to the broad tariffs recently placed on coffee — those are simply revenue-generating tools, not remedies.
What Consumers Can Expect in the Next 6–24 Months
If tariffs increase, or trade privileges expire (such as AGOA in 2025), consumers should expect:
Higher prices for single-origin coffees with a potential an increase of $1–$3 more per 12 oz bag.
Reduced variety on the shelf, as roasters may cut back on origins with steep import costs.
Increased costs of drinks at a cafe - many cafes have already added a $0.50 - $1 up-charge to every drink on their menu to account for the tariffs. Cafe’s already operate on an extremely tight margin.
More blending or rebranding, where distinct micro-lots are replaced with regional or mixed-origin blends.
Pressure on smaller, mission-driven roasters, who may struggle to compete with larger commercial roasters better equipped to hedge risks and absorb costs.
Lastly, What Can We Do?
Contacting your members of Congress is one of the most effective ways to influence policy. By voicing your concerns, you can urge them to support legislation that addresses the tariff issue.
For instance, the bipartisan Trade Review Act of 2025 has been introduced to reassert Congressional authority over trade policy. This bill would require the president to notify Congress of new tariffs, provide justification, and obtain Congressional approval for those tariffs to remain in effect beyond 60 days.
And you can continue to support your local roaster and cafe.
Other than that, I’m not sure what else can be done.
It’s a seemingly dark time for the coffee industry. And sadly, with these new tariffs, many farmers and producers will be discouraged from growing coffee in the next few years. And many roasters and cafe owners might shudder. There will be a very long lasting impact that could affect the next few decades of agricultural production both inside and outside of the United States.
