Trump's tariffs on Brazil could make your coffee even more expensive

Imports most of its coffee from Brazil

Coffee companies may try to mitigate the impact of the tariff by sourcing from other countries, but consumers will ly end up paying more for their java

Brazil, the largest U

Supplier of green coffee beans, accounts for a third of the country's total supply, according to data from the U

Department of Agriculture

Coffee beans need to grow in a warm, tropical climate, making Hawaii and Puerto Rico the only suitable places in the United States to farm the crop

But, as the world's top consumer of coffee, the U

Requires a massive supply to stay caffeinated

Mintel estimates that the U

The increase in trade duties could leave consumers with even higher costs after several years of soaring coffee prices

Inflation-weary consumers have seen prices for lattes and cold brew climb as droughts and frost hit the global coffee supply, particularly in Brazil

Earlier this year, coffee bean futures hit all-time highs

To be sure, there's still time for Brazil to strike a deal with the White House before the tariffs go into effect on Aug

Plus, food and beverage makers are hoping that the Trump administration will grant exemptions for key commodities

Department of Agriculture Secretary Brooke Rollins said in an interview in late June that the White House is considering exemptions for duce that can't be grown in the U. — including coffee

But if that doesn't happen, coffee companies Folgers owner J

Smucker, Keurig Dr Pepper, Starbucks and Dutch Bros will face much higher costs for the commodity

Giuseppe Lavazza, chair of Italian roaster Lavazza, said on Bloomberg TV on Thursday morning that the tariff could mean "a lot of inflation" for the coffee industry

Roasters will try to mitigate the impact of the higher tariff, but it won't be easy. "Every company is always trying to eke out the next efficiency, to dial into their operations or find the way to minimize inflationary pressures, but a 50% tariff on a commodity that fundamentally is not available in the U. — you can't really do much with that," Tom Madrecki, vice president of supply chain and logistics for the Consumer Brands Association, a trade group that represents the consumer packaged goods industry

One mitigation tactic could be to import beans from countries other than Brazil, but companies will ly still be paying more for the commodity. "A characteristic of tariffs, especially when you have tariffs on multiple countries at once, is that not just the inbound cost rises

It allows the pricing floor to also rise," Madrecki said. "If you have cheaper coffee in a country different than Brazil, you're not inclined to sell it at a 30% lower cost

You're going to try to bump your coffee up a bit more, too. "At- coffee brands, JM Smucker's Dunkin' and Kraft Heinz's Maxwell House, have already been hiking their prices this year in response to spiking commodity costs

More price increases could be on the way for consumers, although retailers may push back

Keurig Dr Pepper would consider additional price hikes in the latter half of the year to mitigate the impact of tariffs, CEO Tim Cofer said in late April, after Trump introduced his initial round of so-called recical duties

And Smuckers warned investors on its quarterly conference call in early June that tariffs on coffee were weighing on its fits

Coffee accounts for roughly a third of the company's revenue. "Green coffee is an unavailable natural resource that cannot be grown in the continental United States due to its reliance on a tropical climate," Smuckers CEO Mark Smucker said. "We currently purchase apximately 500 million pounds of green coffee annually, with the majority coming from Brazil and Vietnam, the two largest coffee-ducing countries. "Vietnam, which announced a tentative trade deal with the White House earlier this month, supplies 8% of the U. 's green coffee beans

Under the agreement, the U

Consumers who prefer a caramel macchiato from Starbucks for their caffeine hit will ly see a more muted impact on their wallets

After several quarters of sluggish U

Sales, Starbucks CEO Brian Niccol said in late 2024 that the company wouldn't raise prices in 2025, in the hopes of winning back customers who had complained how expensive its drinks had gotten

While it waits for its turnaround to take hold, Starbucks might choose to swallow the higher coffee costs

The coffee giant also benefits from its diversity — both in suppliers and the breadth of its, which now includes the Refreshers line

Starbucks' packaged drinks, which are distributed by Nestle, could see their cost of goods sold increase 3

Altogether, that represents a 5-cent drag on annual earnings per, according to Charles

For rival Dutch Bros, higher coffee costs also wouldn't hurt its bottom line much

Coffee accounts for less than a tenth of the drive-thru coffee chain's cost of goods sold

Assuming that Dutch Bros sources more than half of its coffee from Brazil, its cost of goods sold would rise just 1. 3%, according to Charles' estimates.