Americans are now paying more for their everyday coffee after US President Donald Trump slapped sweeping tariffs on coffee’s biggest exporter and launched an anti-drug campaign targeting another key producer and supplier.
This impact is immediately felt on the shelves of local coffee shops and grocery stores across the United States.
Nikki Bravo, co-owner of Momentum Coffee in Chicago, had to raise the price of lattes, cappuccinos and other drinks by about 15% last week after the cost of the coffee beans she uses went up by the same amount. She told Fortune that most beans come from Africa.
“At some point we just had to give it up, we couldn’t keep eating it,” Bravo said.
What does the data show?
The average price per pound of ground coffee hit $9.14 in September, up 3% from August’s average of $8.87 and a 41% jump from September a year earlier, according to US government data.
This sharp increase follows a period of rapidly rising coffee prices throughout the year. The Consumer Price Index, which measures a broader sample of all coffee products, including instant coffee, shows that US coffee prices rose 19% compared to September of last year.
What are the primary drivers?
Because the US grows very little coffee domestically and imports 99% of its supply, it is very sensitive to changes in trade policy.
Brazil is the main supplier of coffee to the US, exporting 30% of the market. The tariffs imposed by the Trump administration — a 40% tariff on top of the existing 10% tariff — have caused Brazilian producers to hold back supplies as they negotiate with U.S. roasters over who will cover the additional costs, reducing U.S. supply, Fortune reported.
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Colombia, which supplies 20% of the US coffee market, is subject to a 10% tariff. Recently, Donald Trump threatened to impose even higher tariffs along with ending US aid to Colombia in its anti-drug campaign, pushing bilateral relations between the two nations to their worst point in decades.
Trump recently called Colombian President Gustavo Petro an “illegal drug dealer” in a social media post. Petro responded to the naming by saying, “Mr. Trump has defamed me and insulted Colombia.”
Trump’s post on the social network
Another supplier, Vietnam, which provides 8% of the US coffee market, has been subject to a 20% tariff since the summer.
Trump announced in September that “inaccessible natural resources” could be exempt from tariffs for countries that have trade deals with Washington, but coffee has yet to win any exemptions.
Bill on the abolition of tariffs
In response to these rising prices, a bipartisan group of U.S. House members introduced a bill in September that would eliminate all tariffs on coffee. The bill was sponsored by two individuals – Ro Khanna and Don Bacon.
“We only produce 1% of the coffee Americans consume. It’s one of the best examples that Trump’s blanket tariffs make no economic sense,” U.S. Rep. Ro Khanna, D-Calif., told Fortune.
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Bacon said Friday that he became interested in the issue after seeing how much coffee now costs at the grocery store. He said he is also not a fan of tariffs and believes only Congress has the authority to levy them and not the president, Fortune reported.
Bacon thinks the Trump administration is gradually realizing that imposing tariffs on products the U.S. can’t grow is bad for consumers. He therefore hopes that the bill will pass. “I hope the president and Congress see the positive benefit of eliminating this tariff for ordinary Americans,” he said.
