The Trump administration has targeted Brazil with steep US tariffs of 50%. Coffee shops in the heart of New York are bracing for impact.
When the Trump administration announced another wave of sweeping tariffs, particularly on Brazil, Stone Street Cafe’s managing partner was first confused. Then came fear. A cafe already runs on slim margins and extra costs passed on from tariffs could risk everything.
“If these tariffs are long term, it will put our business in jeopardy,” Antony Garrigues, managing partner of Stone Street Cafe, said. “In New York City, the operating costs are already so high, and these tariffs will make everything much more expensive.
“In the end, if people cannot afford our coffee, and we do not have a profit margin, we will not make it.”
Stone Street Cafe, based in Manhattan, sources green coffee beans from more than 35 different countries, including Brazil. But Brazil is not the only coffee-producing nation facing tariff pressures: Vietnam, Colombia, Ethiopia and Indonesia are also affected.
“These tariffs are not paid by the country. The costs are passed down to the business owner, and consumer,” noted Garrigues. “For now, we are going to try and absorb as much [of] the cost as we can. But at the end of the day, this is a business – so we may have to increase the prices.”
With the growing effects of climate change already inflating coffee prices, other cafes have already done so.
Aside from coffee Ciao Gloria, in Brooklyn, also imports cocoa powder from Brazil. Jams sourced from Italy now face Trump’s 15% tariff on exports from the European Union. The cafe raised prices by about 25 cents per cup, but plans to absorb any additional tariffs costs, at least for now.
“I’m selling sugar and caffeine – I’m basically a drug dealer,” joked owner Renato Poliafito. “So I want to make sure the menu is affordable.”
But then he turned serious. “We have to be vigilant about analyzing the situation before jumping to price increases.”
Customers are already scrutinizing their receipts. US coffee prices rose 14.5% in the year to July, according to official data.
“It’s this idea of shifting baseline where we normalize something being expensive when it shouldn’t [be]and it’s very scary to see,” said Helina Seyoum, 29, who has reverted to making coffee at home. “Now a morning coffee becomes a burden, because you’re obsessing over the costs.”
A daily cafe trip was how Aley Longo, 28, made sure she escaped the confines of her studio apartment and spoke to people outside work in an “affordable” way. Now it’s strictly a weekend activity.
Trump’s tariffs are “bad for Americans, and our quality of life”, Longo said, “and we are suffering, whether it’s as tiny as just being able to buy coffee out, or something so much bigger”.
Those behind the counter know what it’s like to watch the price of a regular purchase grow. Allon Azulai, who owns Kos Kaffe in Brooklyn, which imports beans from countries including Colombia, Honduras and Kenya, described nervously asking vendors for their latest prices each week, as tariffs and mounting demand looms large.
“Right now the industry is so unstable and what worries me if tariffs continue is cafes that do not have big pockets will not be able to survive,” said Azulai.
‘Straight to the American consumer’
As US cafes come under pressure, the coffee producers they source from are also preparing for disruption.
Brazil is the world’s largest coffee producer and exporter. The US is the leading destination of its coffee: about a third of its coffee imports are Brazilian.
The Brazilian Soluble Coffee Industry Association, which represents producers, said the 50% US tariff on the country’s exports amounted to a “clear competitive disadvantage” as other leading countries for coffee production face lower rates, ranging from 10% to 27%.
“This decision not only harms the Brazilian industry but could also negatively affect American consumers, who benefit from the quality and competitive price of our coffee,” the association said.
Brazilian producers and exporters still hope they can lobby for coffee to be exempt from US tariffs, arguing the US produces very little coffee domestically. The US commerce secretary, Howard Lutnick, had previously suggested products not cultivated on American soil could be granted zero tariffs, they note.
If that fails Brazil’s Coffee Exporters Council says it will at least seek to reduce the tariff on coffee to 10%, in line with other Brazilian goods, including oil, orange juice and aircraft. “We remain optimistic and hopeful,” the council said.
New coffee export deals with the US are on hold and shipments ready to go are stuck in storage, adding costs for exporters. China has meanwhile approved 183 new Brazilian firms to export coffee, although the exporters’ council cautioned that sales may take time to materialize.
In Vietnam and Colombia – the world’s second and third largest coffee-producing nations, respectively – exporters hope that lower US tariffs on their coffee will help them steal a march on Brazil.
“The US can’t grow coffee at scale, so tariffs won’t bring production back home,” Timen Swijtink, founder of Lacàph Coffees in Vietnam, said. “With the tiny margins in our industry, any tariff cost goes straight to the American consumer.”
Even with 20% US tariffs on Vietnam, the country’s farmers “are resilient and will find new markets”, added Swijtink, “with global demand strong and China’s demand growing like a rocket ship”.
With the US tariff on Colombia only at the baseline 10%, small coffee growers across the country are shrugging off any immediate impacts. “The average coffee farmer won’t feel it, at least for now,” said José David Posada, a fourth-generation coffee farmer and owner of Capilla del Rosario, a finca in Medellín. “It’s the exporters who will be impacted.”
There is also a sense among some that, given Brazil’s tariffs are at 50%, Trump’s tariff war could even help Colombian business. The country’s coffee cultivation is vital to the national economy, representing 8% of total Colombian exports.
Posada said: “The fact that Brazil has a higher tariff, obviously that’s going to have a positive impact on us, right?”
Guilherme Morya, a coffee analyst at Rabobank, said the 50% tariff on Brazilian coffee may, at least in the short term, shift American buyers toward other sources. “Colombia gains a price advantage, and being the second-largest supplier, it becomes the most obvious candidate to fill this gap,” he said.
But Alejandro Lloreda, a farmer at family-run Cafetal de la Trinidad, which produces specialty coffee, cautioned the difference would only give Colombia “a temporary advantage”. “A coffee tree can take two to three years to produce, and the tariff situation could well change before then,” he said.
Back in New York, cafe owners find themselves in an equally uncertain position.
“The tariffs are to small businesses’ detriment,” said Poliafito, of Ciao Gloria. “Big businesses can find a way around it. But we will suffer the costs.”
“It’s scary to not know if we can continue our business,” added Nick Kim, manager of Koré Coffee in Manhattan. “It’s really a shame, and sad, that you know bad things are coming, but you cannot do anything to change it. We have no option but to see what will come.”
