The bitter cup of Trump’s tariff policy

Coffee prices shoot the US in the midst of the global crisis and Trump tariffs over Brazil

Americans are paying more than ever for coffee at the supermarket. Amid a crisis of supply in the international market and the new tariff policy against Brazil, the price of morning symbol drink has shot, recording the faster increase since the 1990s.

According to data released on Thursday by Bureau of Labor Statistics, Café Mido reached the record value of $ 8.87 per pound in August. The product’s consumer price index rose 21% over the previous year, the biggest leap since 1997. Climbing follows the shot in global markets since last year, when bad crops in large export countries have drastically reduced supply.

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The pressure of tariffs against Brazil

The situation worsened from July, when President Donald Trump determined a 50% on Brazilian imports. Brazil is the world’s largest producer of high quality Arabica coffee and, historically, is responsible for about one third of the grains consumed in the United States.

The impact was immediate. Brazilian exports to the US market have fallen in half in the year, according to data from the Logistics Intelligence Company. The fall intensified in August, when shipments fell more than 75% compared to the same month of 2024.

Other suppliers cannot meet demand

To compensate, US roastors resorted to other major producers, such as Vietnam and Colombia. But, according to Vizion, these origins were not able to cover the gap left by Brazil.

For now, accumulated stocks are damaging the immediate impacts. But relief can be temporary.
“At some point, if Americans keep drinking coffee at a usual pace, these stocks will also have limits,” warns Thijs GeijerSenior Food and Agriculture Economist from Ing. “It will be necessary to send additional shipments again, but the question is: where will they come from?”

The weight of climate change

In addition to the tariff war, the weather has acted as additional strength in high prices. Climate change have been making conditions increasingly unpredictable in key countries. Brazil, the leader in Arabica production, and Vietnam, the largest supplier of the robust used in instant coffees, faced a weak crop recently, which reduced global availability.

The result is that future coffee contracts are already in appreciation, reflecting the expectation of more tightening in supply.

The future of America’s most popular drink

Combined, geopolitical, climatic and logistics factors draw a worrying scenario for consumers and coffee industry in the US. What was once just like a temporary price adjustment begins to assume outlines of prolonged crisis – with the fare over Brazil serving as an aggravating market in an already pressured market.

Meanwhile, millions of Americans are dependent on their daily cup. But the question that echoes between experts and consumers is the same: How much will this habit will cost in the coming months?

Pressure of the food sector by exemptions

The impact of coffee rates did not go unnoticed by the food industry. The industry has been pressuring the White House to create exceptions for products that cannot be cultivated on American soil competitively. Last week, the government released a preliminary list of goods that could receive lower rates in case of new trade agreements – including coffee.

For experts, the effect of tariffs is still underway. “Coffee consumers may not have felt the total impact,” he explained Thijs Geijereconomist from ing. According to him, the shipments that leave the port of Santos, in Brazil, take up to 20 days to reach the United States, where they still go through the process of roasting before reaching the shelves.

The doubt, according to Geijer, is about the pace with which the increases will be felt in the pocket. “Even so, it depends: are the highest prices passed on by the roasting torkers immediately or gradually?” He asked. He added that a significant part of the impact should only be perceived by consumers from October or November. The data is worrying, considering that Two thirds of American adults consume coffee every dayaccording to the National Coffee Association.

Supermarkets try to hold prices

The pressure also comes to retailers. Kroger, the largest US supermarket chain, said it was absorbing part of the increase in costs to avoid direct transfers to consumers. “Occasionally, tariffs will impact some of our prices,” he said Ron Sargentinterim executive of the company, in a teleconference with analysts.

Still, experts warn that with limited stocks and inflation advance, it will be difficult to hold on the readjustments for a long time.

Food inflation on the rise

Coffee climbing is part of a larger scenario of high food. According to the Bureau of Labor Statistics, consumer prices in the US rose 2.9% in August Compared to the same period of the previous year, the largest increase since January.

In the specific case of food consumed at home, there was a high 0.6% in August compared to Julyreverting to remain of 0.1% registered in the previous month. The movement confirms the tendency that food inflation will gain strength again, pressing not only coffee but the entire shopping basket of American families.

With information from Financial Times*