Coffee Prices Surge Ahead of Brazil Trade War Tariffs

Rising Coffee Prices Precede Trade War Tariffs with Brazil

Before the latest round of global trade tensions fully impacted the market, coffee prices have already begun to rise significantly. Consumers are now facing higher costs at grocery stores, even before the United States imposed a 50% tariff on Brazilian products in August. This sudden price increase has caught many off guard, as it appears to be happening much faster than usual.

For example, a 12-ounce bag of Starbucks ground coffee at Publix was priced at $15.29 during the week of August 3, compared to $7.99 in June. Walmart and Winn-Dixie also saw similar increases, with prices ranging from $9.97 to $12.69 for the same size. While some retailers offer promotions like buy-one-get-one-free deals, these do not entirely offset the rising costs. Even Folgers, a well-known brand, is seeing steep prices—$21.99 for a 25.9-ounce can at Publix, which is still expensive despite the promotion.

The Impact of Tariffs on Retailers

Typically, it takes between two weeks and 90 days for tariffs and other trade-related costs to affect consumers. However, this time, the situation seems different. Steven Carnovale, an associate professor of supply chain management at Florida Atlantic University, explains that retailers may be drawing down their stock of pre-tariff products, contributing to the rapid price increases.

The U.S. government’s decision to impose higher tariffs on Brazilian imports is part of President Donald Trump’s broader strategy to protect domestic manufacturing and national security. However, given the lack of coffee-growing in the United States, this move could lead to higher costs for American consumers unless they switch to alternatives like tea.

Geographical Challenges in Coffee Production

Coffee requires specific growing conditions, such as mountainous and humid areas, which are not common in the U.S. Hawaii is the only state that produces any significant amount of coffee, but its output remains minimal. In contrast, Brazil produced 64.7 million bags of coffee in 2024-25, according to the U.S. Department of Agriculture. This stark difference highlights the reliance of the U.S. on imported coffee.

Despite this, Brazil has been purchasing more American products than the U.S. buys from Brazil for years. However, the recent tariffs on Brazilian orange juice concentrates have been exempted, while Brazil faces the highest tariffs due to political tensions with the Trump administration.

Political Tensions and Tariff Justifications

In a letter dated July 9, Trump cited the ongoing trial against former Brazilian President Jair Bolsonaro as a reason for the 50% tariffs on Brazilian goods. The White House criticized Brazil’s legal proceedings, claiming they undermine the rule of law and human rights. However, current Brazilian President Luiz Inacio Lula da Silva has remained relatively indifferent to the tariffs so far.

Additional Pressures on Coffee Prices

Beyond tariffs, coffee prices have been rising due to a combination of factors. Scott Angelo, cofounder and head coffee roaster at Oceana Coffee, notes that unroasted bean costs have increased over the past year due to both natural and man-made challenges. For instance, unusual weather events, including frost, in Brazil during its winter season led to lower production, causing global prices to spike.

China, the world's largest coffee consumer, further exacerbated the situation by buying up large quantities of Brazilian coffee, driving up prices globally. This scarcity has attracted investment houses interested in trading coffee futures, adding another layer of pressure on prices.

Looking for Alternatives

Angelo suggests that the high tariffs on Brazil might push coffee producers to seek alternative sources. Currently, about 25% to 35% of Oceana Coffee’s blends come from Brazil, known for its sweet flavor. However, he believes that coffee from Honduras and Colombia could become more appealing, both in terms of taste and cost. Additionally, African countries like Rwanda and Uganda are producing high-quality coffee that may gain more attention.

As the trade war continues, coffee lovers may need to adjust their habits or explore new options to manage rising costs. The combination of tariffs, climate change, and global demand is creating a complex landscape for the coffee industry, with no easy solutions in sight.