Coffee drinkers in the United States will have to brace for even steeper prices to get their daily boost thanks to Donald Trump’s new tariffs on the world’s largest producers. Their sugar fix will also take a hit, as chocolate imports are affected.
The levies, which will hit coffee imports from Brazil, Colombia and Vietnam, are expected to increase prices in shops and cafes. This comes at a time when bean costs are already on the rise due to supply shortages. Goods from Colombia and Brazil, the world’s largest producers of high-quality arabica coffee beans, will be subjected to tariffs of 10% under the new measures.
Vietnam has fared even worse, with eyewatering 46% levies on their goods. The South-east Asian nation is the world’s main producer of the cheaper robusta beans - typically used in instant coffee - and another key exporter to the US.
“Ultimately, the USA is the single largest importer of coffee in the world, the ultimate nation of coffee drinkers. So consumers will suffer,” warned Kona Haque, head of research at commodity trader ED&F Man, told the Financial Times.
Haque said the tariffs would "immediately" push up the cost of green coffee - raw beans - to roasters, which would "inevitably" be passed on to consumers.
She said: "At the end of the day, chocolate and coffee are not like automotive or shipbuilding, which Trump is trying to encourage more domestic production of.
"The USA simply cannot produce these products."
Coffee prices have already taken a pounding in recent months due to unfavourable weather conditions in key growing regions, including Brazil. Meanwhile, cocoa prices have almost trippled in the past year as a result of extreme weather and disease impacting harvests.
Ivory Coast, or Côte d'Ivoire - the world’s biggest cocoa producer - has been hit with levies of 21%.
Even before the tariffs, Dirk Van de Put, chief executive of Mondelēz - makers of Oreo and Toblerone - said in February the company was navigating "unprecedented cocoa cost inflation".
The US produces only a small fraction of its own coffee and cocoa, with Hawaii being the main domestic source of both. According to Lucrezia Cogliati, Commodities Analyst at BMI, the US produces around "0.2% of the coffee it consumes".
Americans consume an estimated 146 billion cups of coffee annually, making it the second-most consumed beverage behind water. According to Joe’s Garage Coffee, 63% of Americans have a mug of coffee each morning.