There are many, many uncertainties plaguing the coffee supply chain—futures prices, unpredictable weather patterns due to climate change, decreased output, green coffee theft—and now tariffs can be added to last list. The impact of a potential trade war is being particularly felt in North America, where the United States has imposed a sweeping 25% tariff on all goods imported from their neighbors and strongest allies Canada and Mexico. Canada has imposed a retaliatory tariff on US goods in the same amount.
American coffee companies are already feeling the squeeze on both ends. Many companies import large amounts of green coffee from Mexico and have “roasting, packaging and trading bases in both the United States and Canada in order to better supply clients,” per one Reuters report. The uncertainty has led the National Coffee Association to formally request the US government for an exemption to all tariffs.
As reported by Reuters, NCA President and CEO Bill Murray officially requested the stay, stating that the additional taxes could increase prices by up to 50%. He goes on to note that, unlike other products included in the tariffs, there is no domestic alternative; save for small amounts in Hawaii (and even smaller ones in California), coffee is not produced on American soil. Thus the tariffs wouldn’t be effective in “[addressing] unfair practices or incentivize domestic producers.”
America is the world’s largest consumer and importer of coffee, and chaos in the US market can trickle out worldwide. How, or if, that downstream effect presents itself more broadly remains to be seen. And who knows, maybe the almighty U S of A will tack on a few tariffs to our European friends for nationalist xenophobic economic reasons.
Zac Cadwalader is the managing editor at Sprudge Media Network and a staff writer based in Dallas. Read more Zac Cadwalader on Sprudge.
