^{Getty Images}

Trump’s Brazil Tariff Threatens to Make Your Coffee More Expensive

Coffee lovers in the United States may soon feel the sting of global politics in their wallets. President Donald Trump has proposed a sweeping 50% tariff on Brazilian imports, a move that would directly impact the country’s coffee supply chain and could push consumer prices even higher after years of rising costs.

Why Brazil Matters to America’s Coffee Supply

Brazil is not just any coffee supplier—it is the largest exporter of green coffee beans to the United States, accounting for roughly 33% of U.S. coffee imports, according to the U.S. Department of Agriculture. Given that coffee thrives in warm, tropical climates, U.S. domestic production is limited to Hawaii and Puerto Rico, making America heavily reliant on imports to meet its massive coffee demand.

In 2024, the U.S. coffee market was valued at $19.75 billion, according to market research firm Mintel, and continues to grow. A tariff of this magnitude on Brazilian beans could have a significant impact on pricing, affecting everyone from small cafes to global chains.

Ongoing Coffee Price Pressures May Be Exacerbated

The proposed tariff comes after years of global supply disruptions, with droughts, frosts, and weather volatility in Brazil already tightening supplies. Coffee futures recently jumped 1% in reaction to the tariff news, although prices remain below their February peak.

This tariff could further increase the cost of a commodity already facing inflationary pressure. If Brazil and the U.S. fail to reach a compromise before the August 1 deadline, coffee importers may be forced to shift sourcing, or pass rising costs on to consumers.

Can Exemptions Be Made?

There’s still hope for an exemption. U.S. Secretary of Agriculture Brooke Rollins stated in late June that the White House is weighing possible carve-outs for agricultural goods that can’t be produced domestically—coffee being a prime candidate.

However, there are no guarantees. If an exemption isn’t granted, leading U.S. coffee companies including Starbucks, J.M. Smucker (owner of Folgers), Keurig Dr Pepper, and Dutch Bros could face millions in additional costs.

How Coffee Giants May Be Impacted

Analysts estimate that the impact will vary depending on a company’s sourcing strategy and pricing flexibility. According to TD Cowen analyst Andrew Charles:

• Starbucks imports beans from 30 different countries, but Brazil still accounts for 22% of its coffee. The tariff could increase its North American cost of goods sold by 0.5% and shave 5 cents off its annual EPS.
• Starbucks’ bottled beverage line, handled by Nestle, could see an even bigger hit—a 3.5% increase in cost of goods sold.
• Dutch Bros, known for its drive-thru model, sources more than half its beans from Brazil, but coffee represents less than 10% of its total cost of goods. The tariff would only raise its costs by about 1.3%, a manageable increase.

Despite the looming cost pressure, Starbucks has pledged not to raise drink prices in 2025, focusing instead on winning back price-sensitive customers. With its diverse menu and higher-margin items like Refreshers, the company may absorb short-term shocks without immediate changes at the counter.

The Bigger Picture

Giuseppe Lavazza, chairman of Italian coffee giant Lavazza, warned on Bloomberg TV that the U.S. tariff on Brazil could trigger “a lot of inflation” for the global coffee sector. While large brands may withstand short-term cost surges, smaller roasters and independent cafes may find it harder to manage margins without passing costs on to consumers.

Tariff Talks Could Determine Your Future Latte Price

If the 50% tariff goes into effect without exemptions, the cost of imported Brazilian coffee could surge overnight—pressuring companies, altering supply chains, and ultimately raising prices at your local coffee shop.

With the U.S. consumer already facing inflation fatigue, another bump in coffee prices could add fuel to the fire. For now, all eyes are on whether Brazil and the Trump administration can strike a deal before the brewing trade storm boils over.