Coffee Prices Could Skyrocket From Proposed Tariff Changes

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Coffee prices could skyrocket by up to 50% if the Trump administration fails to exempt coffee imports from proposed tariffs on Canada and Mexico, warns the National Coffee Association.

Quick Takes

  • The National Coffee Association is lobbying for coffee to be exempted from Trump’s proposed 25% tariffs on Mexican and Canadian imports.
  • Coffee prices have already hit record highs of $7.25 per pound for ground roast coffee and $4.30 per pound for wholesale arabica.
  • Despite not being grown domestically, coffee contributes approximately $343 billion annually to the US economy.
  • Three in four Americans are regular coffee drinkers, making it an essential commodity that lacks domestic alternatives.

Coffee Industry Requests Tariff Exemption

The National Coffee Association (NCA) has formally requested that the Trump administration exempt coffee imports from the proposed 25% tariffs on Mexican and Canadian imports set to take effect on April 2, 2025. These tariffs, announced by President Trump to combat illegal immigration and fentanyl trafficking, could significantly impact American coffee consumers who are already experiencing record-high prices. The tariffs would affect coffee imported via Canada and Mexico, despite most coffee originating from countries outside the USMCA framework and merely transiting through these neighboring nations.

NCA President Bill Murray emphasized the unique position of coffee in the American economy, noting there is no domestic alternative to imported coffee. The coffee industry creates jobs and economic activity throughout the country, with coffee being a daily ritual for millions of Americans. Imposing additional costs on this essential commodity could disrupt supply chains and dramatically increase consumer prices at a time when coffee costs are already at historic levels due to global supply constraints.

Perfect Storm of Price Pressures

Coffee prices have been steadily climbing due to multiple converging factors. By February 2025, the average price of ground roast coffee reached an unprecedented $7.25 per pound. Wholesale arabica coffee prices doubled year-over-year to $4.30 per pound. These increases stem from climate-related impacts affecting major coffee producers like Brazil and Vietnam, with coffee exports from Asia and Oceania decreasing by 31.2% in 2024. Geopolitical tensions and shipping delays in the Red Sea and Suez Canal have further inflated costs, creating a “perfect storm” of supply chain disruptions.

Adding a 25% tariff to this already strained market could push coffee prices beyond what many American consumers can afford. Industry experts predict coffee roasters will have little choice but to pass increased costs to consumers. Unlike other products, coffee has relatively inelastic demand, meaning consumers are less likely to substitute other beverages, giving companies more pricing flexibility but potentially creating financial strain for households.

Economic Impact Beyond the Cup

The coffee industry contributes approximately $343 billion annually to the US economy with complex, interconnected operations across North America. The NCA highlights that most coffee types are excluded from the USMCA free trade agreement, making them subject to tariffs despite not being produced domestically. As the world’s largest importer and consumer of coffee, the United States stands to face significant economic consequences if these tariffs are implemented without exemptions for coffee.

The situation is further complicated by growing coffee consumption in China, which threatens to strain global supply chains even more. With three in four Americans being regular coffee drinkers, the NCA argues that exempting coffee from tariffs would protect both consumers and businesses from unnecessary economic hardship. The tariffs would effectively impose a tax on American coffee drinkers without addressing the immigration and drug trafficking concerns they are designed to combat.

Sources:

  1. US coffee drinkers can expect rising prices as perfect storm of factors impact global supply chains
  2. US coffee industry asks Trump administration to exempt product from tariffs
  3. National Coffee Association calls for coffee exemption from tariffs

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