How U.S. Tariffs Impact Coffee

Let's get this out of the way. Tariffs are taxes, paid not by foreign governments, but by American companies. Like us. 

The Trump Administration enacted broad tariffs on U.S. imports, effective April 5th. On April 9th, The Trump Administration announced a complete 90-day pause on all the “reciprocal” tariffs, still leaving a 10% universal tariff in place on all countries, with the exception of China, which has higher rates. 

Less than 1/10th of 1% of coffee consumed in the U.S. is grown domestically, in Hawaii and Puerto Rico. In 2023, the U.S. imported $8.2 billion dollars worth of coffee. Americans drink 400 million cups of coffee per day. 

The green coffee import partners we work with will be directly responsible for paying these tariffs at the time of customs entry—via immediate ACH transfer. In real terms, that’s a sudden and significant increase in the cost of goods for importers, and a shock to their cash flow projections.

A standard container of coffee contains about 300 bags, or about 45,000 pounds of green coffee. Each container will cost the importer an additional $15,000 to $25,000 due immediately upon arrival. They will need to take this cash flow from other parts of their operations budget, or tap into credit and borrow these funds. The financial stress will be sudden and impactful. 

As a roaster, we expect the cost of the tariffs to be added to the cost of our green coffee. We will need to pay this as we purchase our coffees from our import partners. In order to maintain our profitability, we have no choice but to pass this cost along to our customers, meaning higher prices for our wholesale and retail customers. 

For our business, the uncertainty and volatility around tariffs makes it very difficult to plan for the future. We cannot make capital investments in equipment, or forward looking investments in hiring, if there is not stability in the market. Holding cash, reducing expenses, and waiting is the safest short-term strategy. 

Everyone along the supply chain in coffee will feel the impact. Tariffs make it harder for roasters to keep sourcing the coffees they believe in, making it difficult for producers to plan for the future. We expect to see disruptions in certain origin availability, as the spot market for coffee is likely to become very scarce. 

Without question importers, roasters, and consumers will unfortunately bear the cost of U.S. tariffs. 

We will update this post as more tariff information becomes available or changes.