Coffee chains, already stung by rising bean prices thanks to widespread drought that has wiped out many crops, are now dealing with tariff-related heartburn.
U.S. chains rely on imported coffee and just 10.5% of it comes from Mexico and Canada, where the standing United States-Mexico-Canada Agreement waives tariffs on many of those imports, according to T.D. Cowen. Major coffee-producing nations, including Brazil and Vietnam, face greater duties.
Bob Fish, co-founder of Michigan-based Biggby Coffee, said nine shipments of beans en route from Nicaragua to supply his stores could now be hit with an 18% tariff. "That will be a devastating 18%," Fish said.
Shares in Starbucks, the world's largest coffee chain, are down 20% since Wednesday's market close following President Trump's tariff announcement. Starbucks buys Arabica beans which largely come from Brazil and Colombia, where 10% tariffs are on the table. Vietnam, where duties are to rise by 46%, has a smaller role in producing Arabica beans, according to Bernstein. The company has said it is committed to not raising customer prices on its coffee this year.
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April 07, 2025 14:23 ET (18:23 GMT)
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