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NEW: How Trump Tariff Wars Will Impact Your Coffee
A New Coffee Watch Report Warns Tariff Wars Deepen Inequality for Millions of Coffee Farmers and Could Make Coffee Consumers Pay More
Washington D.C., July 2025 - A new report from international watchdog organization Coffee Watch exposes how global tariffs are rigged against coffee-producing countries, funneling cash to the world’s wealthiest. U.S. President Donald Trump’s escalating tariff wars are only making the crisis worse with a new 50% tariff looming on U.S. imports from Brazil, the world’s largest coffee producer, and additional tariffs on Mexico, Vietnam and others poised to deepen havoc.
“This is not only about coffee. This is about justice,” said Etelle Higonnet, Director of Coffee Watch. “Trump’s tariff wars will be a poverty multiplier for coffee-growing countries. Tariffs already have brought many farming communities to the brink of disaster, but Trump’s tariff wars threaten to collapse entire rural economies from Chiapas to Minas Gerais and beyond. Coffee has 25 million farmers and 100 million farmworkers, that’s millions of lives poised to suffer because of the whims of a U.S. president who uses tariffs as his own personal protection racket. And, by the way, he doesn’t even drink coffee.”
After decades of tariff-free imports, the Trump administration slapped a 10% tariff on all coffee imports, with even steeper tariffs planned for certain coffee-producing countries. For countries like Mexico (which exports 39% of its coffee to the U.S.) and Nicaragua (which sends 50%), the consequences will be devastating, pushing already poor farmers into extreme poverty.
Though a few coffee growing countries like Peru may suffer less, the report warns that most producer nations like Brazil, Vietnam, Colombia, Indonesia, and Guatemala may all be starkly affected. Thousands of farmers may go bust, and many small coffee shops may go under. If wholesale coffee costs that US cafes or restaurants or supermarkets pay rise by 50%, this could “translate into an increase of 25 cents a cup within three months," said Ryan Cummings, the chief of staff for the Stanford Institute for Economic Policy Research.
Trump’s tariff wars will amplify an already dangerously abusive system: While producing countries account for 74% of the global export volume, they receive only 57% of the value. The production stages where most value is added, roasting and decaffeinating, are done almost entirely in non-producing countries, especially in Europe, where high tariffs penalize imports of processed coffee. According to Coffee Watch’s report, 99% of coffee exports from producer countries are raw, low-value, unprocessed beans, despite the fact that roasted coffee fetches more than double the price.
With many farmers and farmworkers already below the extreme poverty line, set by the World Bank at $2.15 a day, increased tariffs on coffee will push millions deeper into crisis.
“Coffee producing countries grow the crop and bear the risks, yet they’re locked out of the real profits by a system that benefits the Global North,” says Higonnet. “The world can’t claim to love coffee while turning a blind eye to the exploitation that fuels it.”
Though U.S. trade wars remain the greatest threat at present, tariffs on coffee from the European Union, United Kingdom, Switzerland and Japan have been deeply problematic for years. These impose such high tariffs on roasted or decaffeinated coffee that they effectively discourage producer nations from developing local processing industries. Most consuming-country tariffs penalize coffee-producing countries, leaving them with limited revenue, though they are still expected to fund climate disaster response, farm input subsidies, and poverty relief, all while receiving only a fraction of the final value of their coffee.
In contrast, countries like Australia, Canada, and Norway demonstrate that fairer coffee trade is entirely possible, as they apply no tariffs to roasted or otherwise processed coffee from producer nations. “Tariff reform is not just good policy,” says Higonnet. “It’s key for the future of coffee.”
For interviews, data requests, or to speak with the authors, please contact:
info@coffeewatch.org.
Update September 2025:
Since the publication of our tariff report, there have been several potentially positive developments for the coffee sector:
- U.S. Commerce Secretary Howard Lutnick stated publicly that coffee would be exempt from tariffs. (See the clip at minute 8 in the below video.)
- In a letter seen by Reuters, the United States’ National Coffee Association asked the Trump administration to exempt coffee, warning that additional duties on Canada and Mexico could increase U.S. prices by as much as 50%. Read more.
- The bipartisan United States Congressional Coffee Caucus issued a letter to the U.S. trade agency urging that coffee be exempted from current and future tariffs. Read more.
- Meanwhile, the price of coffee has risen sharply, and many businesses are already feeling the strain of tariff policies. Small roasters report being squeezed by higher import costs, while cafés face difficult choices between raising prices or absorbing losses. The uncertainty is also rippling back through supply chains, creating new risks for coffee farmers who are already vulnerable to volatile markets.
- In response to the U.S. tariffs of up to 50%, Brazil has unveiled a “Sovereign Brazil” aid package, including a 30 billion-real (approx. USD 5.55 billion) credit line—via the Export Guarantee Fund (FGE)—to support coffee exporters, with an additional USD 823 million earmarked for small firms. Read more.
- President Trump has asked the U.S. Supreme Court to review and overturn a federal appeals court ruling that found most of his sweeping trade tariffs illegal, urging the justices to make a decision by September 10. Read more.
Now it remains to be seen whether coffee will, in fact, be exempted from Trump’s tariff wars — or whether the sector will face even greater economic pressure in the months ahead.