Coffee lovers may soon face sticker shock at the register as the National Coffee Association desperately appeals to the Trump administration for a tariff exemption that could prevent prices from soaring by up to 50%.
Top Takeaways
- The National Coffee Association is urging the Trump administration to exempt coffee from new tariffs on Mexican and Canadian imports that begin April 2, 2025.
- US coffee prices have already hit record highs, with ground roast coffee reaching $7.25 per pound and wholesale arabica prices doubling to $4.30 per pound.
- The coffee industry contributes approximately $343 billion annually to the US economy, with three in four Americans being regular coffee drinkers.
- Climate impacts, shipping delays in the Red Sea, and growing global demand are already straining coffee supply chains globally.
- Most coffee types are excluded from USMCA free trade protections, making them vulnerable to the proposed 25% tariffs.
Mounting Pressure on American Coffee Prices
The American coffee industry is facing unprecedented challenges as multiple factors converge to drive prices to record levels. In February 2025, the average price of ground roast coffee reached a staggering $7.25 per pound, while wholesale arabica coffee prices doubled year-over-year to $4.30 per pound. Climate-related impacts have severely affected major coffee producers like Brazil and Vietnam, with exports from Asia and Oceania decreasing by 31.2% in 2024.
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Geopolitical tensions have further complicated the situation. Shipping delays in the Red Sea and Suez Canal have increased transportation costs, while China’s rapidly growing coffee consumption is expected to strain supply chains further. Coffee roasters and retailers are attempting to absorb some costs, but industry analysts predict that price increases will inevitably be passed on to consumers, particularly as coffee has relatively inelastic demand – consumers are less likely to substitute or forgo their daily cup.
NCA Warns of Tariff Impact on American Consumers
The National Coffee Association, representing America’s coffee industry, has launched an urgent appeal to the Trump administration, warning that the upcoming 25% tariffs on Mexican and Canadian imports could devastate the coffee market. President Trump announced these tariffs to combat illegal immigration and fentanyl trafficking, with implementation scheduled for April 2, 2025. While the administration’s border security goals are clear, the NCA argues that coffee imports should be exempted due to their critical economic importance and lack of domestic alternatives.
NCA President Bill Murray has emphasized that there simply is no domestic alternative to imported coffee. With the coffee industry contributing approximately $343 billion annually to the US economy and three in four Americans being regular coffee drinkers, the economic impact of substantially higher prices would be felt across the country. The Association warns that tariffs could increase coffee prices by as much as 50% – a significant blow to consumers already facing elevated grocery costs.
Trade Complexities and North American Market Disruption
The coffee tariff situation is particularly complex because most coffee types are excluded from the United States-Mexico-Canada Agreement (USMCA) free trade protections. This makes coffee especially vulnerable to the proposed tariffs. The North American coffee market operates with highly interconnected operations spread across the US, Canada, and Mexico, creating a delicate trade ecosystem that tariffs could severely disrupt. As the world’s largest importer and consumer of coffee, the United States has a vested interest in maintaining smooth trade relationships with coffee-producing nations.
With established supply chains that have evolved over decades, sudden tariff implementations could create significant disruptions that ripple throughout the industry, ultimately affecting everything from small coffee shops to large retail chains selling packaged coffee. The NCA continues to press its case, hoping to secure an exemption before the April 2025 implementation date.
Sources:
- US coffee drinkers can expect rising prices as perfect storm of factors impact global supply chains
- US coffee industry asks Trump administration to exempt product from tariffs
- National Coffee Association calls for coffee exemption from tariffs
