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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
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.
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.