Unless you've been disconnected from TV, radio, and the internet over the past few months, you're likely at least somewhat familiar with the rapidly changing landscape around tariffs and import duty. If you're a regular drinker of specialty coffee, you may be curious about how the political environment and tariff changes are affecting the coffee market, specifically.
Here's what you should know about coffee and tariffs:
What is a tariff anyway, and who pays them?
A tariff is a tax, collected by the Federal government when goods are imported from outside the country. Tariffs can vary wildly based on the specific goods and their country of origin.
Tariffs are paid by the importer. That includes coffee roasters like Klatch Coffee, and brokers who work with coffee producers. While tariffs are not directly paid by consumers, ultimately, rising costs will lead to higher prices in cafes and on the grocery shelf as roasters must pass on at least some costs to remain profitable and sustainable.
Coffee prices were already near record highs (pre-tariff changes)
Disregarding recent tariff changes for a moment, note that green coffee prices (that's industry jargon for "unroasted coffee") paid to coffee growers and producers by importers, roasters, and brokers had already reached new record highs in February 2025. Price increases have been driven by weather events, (such as drought and floods affecting the coffee harvest in countries like Brazil), as well as an increase in total worldwide demand. Consumption of coffee in the USA is flat, for the most part, but continues to grow rapidly in Asia, increasing total demand, leading to higher prices as more buyers compete for a finite amount of green coffee.
Uncertainty and speculation in the coffee market has also driven price increases. Early in the Trump administration, a new tariff was briefly floated on imports from Colombia, before quickly being retracted. While that tariff ultimately was not implemented, it briefly created some panic buying that drove prices upward. Coffee producers, seeing rising prices, have also withheld some inventory from sale, hoping to capitalize on even higher prices in the future. That reduced supply, leading to higher prices.
Although prices pulled back slightly in March and early April, they still remained at near-record historical highs. As of this writing in late April 2025, we've seen prices rise again, and for the moment, they're back at February 2025 levels - much higher than the historical average.
When do potentially higher prices reach consumers?
When green coffee prices on the world market go up, consumers will see higher prices for coffee beans at their favorite cafes, online, or on the grocery shelf. Change isn't necessarily immediate, however, because of the time associated with harvesting, processing, and roasting coffee beans. There is also time in transit with shipping carriers. Depending on the item you're buying, changes might be seen in 3-6 months.
New "liberation day" tariffs
In early April, a new round of tariff increases was announced. The rate varies by country, but broadly speaking, a new base 10% tariff that affected every coffee-producing country was applied, additionally, new tariffs well above and beyond the 10% rate were added on some countries; in some cases, they are much higher than previously existing rates.
Some of the most-affected coffee-producing countries affected by the Liberation Day tariffs include Vietnam, China, Indonesia, and Nicaragua. As of this writing, Klatch Coffee does not import coffee from Vietnam or China, however, we do offer coffee from Indonesia and Nicaragua; more importantly, every other country we import from is affected by the new 10% tariff, which is levied on Brazil, Colombia, Peru, Costa Rica, Guatemala, and El Salvador and others.
Left in place, this means an immediate 10% increase in the price we pay for coffee next time we order. While we can draw on existing inventory that's already in the United States for a limited time, ultimately, our green coffee is consumed and must be replenished (at new, higher prices) on a regular basis.
Is my favorite coffee imported? What about coffee grown in the USA?
One way to avoid higher tariffs is to purchase American-made goods that don't come from a foreign country. While a small amount of coffee is grown in the United States (primarily Hawaii), the tiny amount produced annually can't come anywhere close to meeting the total demand in the USA.
As a result, more than 99% off the coffee served in the United States is imported from another country. That, in turn, makes it subject to ongoing tariff changes.
Nearly 100% of Klatch’s green coffee is imported from coffee producing regions outside the USA, with one exception - Hawaii Rusty's Ka'u, which is sourced from Lori and Joan Obra on the Big Island. Other than that single coffee, everything in our current inventory is imported. Make no mistake, excellent coffee is grown in Hawaii! But even if we bought all the coffee produced across the entire state, that barely makes a dent in the total demand for coffee in the USA.
If we don't produce much coffee in the USA, why isn't coffee exempt?
A stated goal of tariffs is to make domestic goods more competitive. But if there isn't much of a domestic coffee market in the first place, who exactly is being protected? That's a good question. In other industries, an argument can be made that higher tariffs on foreign goods is a strong incentive to domestic product.
That doesn't work in the coffee space, however. Coffee only grows in specific geographic and climate regions around the world, we can't produce significant quantities in the United States, no matter how much investment in equipment was made.
The National Coffee Association has been advocating for a coffee exclusion from the "Liberation Day" tariffs for these reasons, and we're optimistic that there might be tariff relief for coffee importers in the future.
What about other factors?
Green unroasted coffee prices are only one component in a fresh-roasted bag of specialty coffee that's ready to use. Costs for product packaging, shipping, labor, insurance, and other services are up too - each of which is part of the retail price you pay for a bag of coffee, or for a beverage in a cafe.
How is Klatch Coffee adapting to higher prices?
In January 2025, Klatch Coffee raised prices on a few varieties of fresh-roasted coffee bags. This happened after several years of absorbing ongoing price increases without passing them on to consumers. The increase worked out to about $0.10 per cup of brewed coffee, but that was before the new tariffs announced in April 2025.
Passing price increases directly on to our customers is only one possible solution, and we're working hard on creative solutions as alternatives. These include:
- exploring relationships with new producers
- tweaking product packaging so it can be shipped more economically without changing the time in transit
- importing coffee from new countries, or countries less-affected by tariff changes
- making business changes unrelated to coffee - for example, we re-vamped our online and in-cafe rewards programs this Spring, offering new ways for customers to earn and redeem points
- rolling out a no-charge oat milk option in our cafes (historically, oat milk has been an upcharge)
What about coffee producers? How do they respond?
When prices on the world market rise, producers are incentivized to make more. That can mean additional planting, allocating additional land for coffee, and making investments in equipment that can increase supply.
Increased future supply can lead to stabilizing or lowering prices if total demand stays flat, however, these are longer-term changes that take time to impact the market. Compare with tariff changes that take effect almost immediately.
Should you "panic buy" coffee, or stock up on your favorites?
Probably not. While it makes sense to pay attention to changing prices on some other consumer goods, coffee is a little different, because it should be consumed fresh. Running shoes, textbooks, or tee shirts, in contrast, don't degrade or expire sitting unused on the shelf. In those circumstances, it might make sense to speed up planned purchases to get ahead of future tariff increases, but not for coffee.
At Klatch Coffee, we work hard to deliver the freshest possible roasted coffee to you, and we want you to enjoy it at its peak, with the best possible flavor and aroma. For that to happen, you should consume fresh-roasted coffee shortly after delivery. While it might be tempting to "stock up", whether due to convenience or fear of future price increases, you'll get much better results in your cup if you order only as needed.
Where we're headed from here
We're optimistic that relief from new tariffs is on the horizon. Already, some have been retracted or modified, with various industries receiving full or partial exemptions, and we're hopeful that coffee will soon as well.
When you sit down for a few moments of relaxation with a beverage prepared by one of our expert baristas, or a moment of calm after brewing at home, we hope you find it well worth the cost. Klatch Coffee is committed to delivering incredible value, even we are ultimately forced to raise prices, and our mission hasn't wavered.
We appreciate your support!
