Brace for the Most Expensive Coffee Yet, as Trump's Tariffs Mix With the Climate Crisis

Gizmodo

4 days ago

Eight years ago, when Debbie Wei Mullin founded her company Copper Cow, she wanted to bring Vietnamese coffee into the mainstream.
Vietnam, the world's second-largest exporter of coffee, is known for growing robusta beans. Earthier and more bitter than the arabica beans grown in Brazil, Colombia, and other coffee-growing regions near the Equator, robusta beans are often thought of as producing lower-quality coffee.
In an effort to rebrand robusta, Mullin signed deals with coffee farming cooperatives in Vietnam and created smooth blends. Over the years, she helped a cohort of farmers convert their operations to organic. 'We put in huge investments and were certified as the first organic specialty-grade coffee farms ever in Vietnam,' said the CEO and founder. In a few weeks, Copper Cow is planning to launch its first line of organic coffee at Whole Foods and Target.
But the second Trump administration has changed the calculus of her business. Mullin said she 'was bullish' about her company's prospects when President Donald Trump first took office, believing that Vietnam would likely be exempt from exorbitant tariffs since the president has many supporters in the coastal Southeast Asian country. Then, in April of this year, the White House announced a 46 percent tariff on goods from Vietnam.
The shock left Mullin rethinking the very thesis she had set out to prove. 'A big part of our mission is about how robusta beans, when treated better, can provide this really great cup of coffee at a lower price,' she said. 'Once you put a 46 percent tariff on there, does this business model work anymore?'
Trump soon paused his country-specific tariffs for a few months, replacing them with a near-universal 10 percent tax. This month, Trump announced on social media that he would lower Vietnam's eventual tariff from 46 to 20 percent—a sharp price hike that still worries Mullin. Meanwhile, Trump has threatened to impose an astounding 50 percent tariff on goods from Brazil, the nation's largest importer of coffee, starting August 1.
'I joke with my partner that I feel like I'm in a macroeconomics class,' said Mullin. In lieu of raising its prices, Copper Cow, which sells directly to consumers as well as to retailers, has scrambled to cut costs by reconsidering its quarterly team get-togethers and slowing down its timeline for helping more farmers go organic. The price of coffee hit an all-time high earlier this year, a dramatic rise due in part to ongoing climate-fueled droughts in the global coffee belt. As the U.S. considers fueling a trade war with coffee-producing countries, 'it just feels like such an insult to an injury,' said Mullin. 'It's like, let's have an earthquake hit a place that is in the middle of a hurricane.'
Economists like to say that demand for coffee is relatively inelastic—drinkers are so attached to their daily caffeine fix that they keep buying it even when prices increase. As the Trump administration mounts its retaliatory trade agenda, that theory will be put to the test. Coffee growers, as well as the roasters and sellers that purchase [from] them in the U.S., are now facing unforeseen geopolitical and economic challenges. 'We have not seen tariffs of this magnitude before,' said David Ortega, a professor of food and economics policy at Michigan State University. 'There's no playbook for this.'
Should Trump's threatened tariffs go into effect next month, it will likely hurt consumers, as many businesses will pass on the costs by raising prices. But it could also have ripple effects on coffee farms, as companies may cut costs by pulling back on investments in environmentally conscientious practices like organic or regenerative agriculture. 'Our goal was always to slowly convert the rest of our products to certified organic,' said Mullin. 'And we feel like that is not an option anymore because of the tariffs.'
Even if the tariffs do not go into effect in August, the ongoing economic uncertainty will likely impact coffee growers in Brazil, which provided 35 percent of America's unroasted coffee supply as of 2023. As U.S. coffee companies navigate the Trump administration's evolving trade policies, they are likely to seek out new, cheaper markets for coffee beans. 'Suddenly, they become less attached to where they source their coffee from,' said João Brites, director of growth and innovation at HowGood, a data platform that helps food companies measure and reduce carbon emissions along their supply chain.
The problem with that, according to Ortega, is that other countries in the coffee belt, such as Colombia, do not have the production capacity to match Brazil's and meet U.S. demand for coffee. If the threat of punitive tariffs on Brazil kickstarts an increase in demand for coffee from other countries, that will likely raise prices. For coffee drinkers, 'there are very few substitutes,' said Ortega.
These pressures on coffee farmers and buyers are coming after a period of worsening climate impacts. A majority of coffee grown in Brazil—about 60 percent—comes from smallholder farms, grown on about 25 or fewer acres of land. 'The current reality they're operating in is that they're already very stretched,' particularly because of weather disruptions, said Brites. Coffee grows best in tropical climates, but in recent years unprecedented droughts in Brazil have stunted growers' yields, forcing exporters to dip into and almost deplete their coffee reserves. Vietnam has been rocked by drought and heat waves—and though robusta beans need less water to grow than arabica beans, making them a relatively climate-resilient crop, growers have also seen their yields decline. (Mullin said she is seeing early signs of harvests rebounding this year.)
Brites speculated that U.S. companies buying from smallholder farms in Brazil may be able to pressure growers into selling their beans at lower prices, adding to the economic precarity that these growers face. 'For a lot of these coffee growers, the U.S. is such a big market,' he said, adding that it would take time for them to find new buyers in other markets.
Growers themselves are worried. Mariana Veloso, a Brazilian coffee producer and exporter, said producers are facing logistical challenges—and anticipating more. 'If we want to ship a coffee in the next month, we will probably not be able to,' said Veloso, remarking that sometimes cargo ships holding coffee sit at Brazilian ports for weeks before setting out. Shipping companies seem to be delaying shipments from Brazil, said Veloso, perhaps in anticipation of the looming tariffs.
In the U.S., not every coffee company sources from Brazil or Vietnam. But the Trump administration's existing 10 percent across-the-board tariffs are still rattling the coffee business. 'We source coffees from all around the world. So we're not immune to anything,' said Kevin Hartley, founder and CEO of Cambio Roasters, an aluminum K-cup coffee brand. He added, 'You know, 10 percent here and 30 percent there, that's not trivial.'
Hartley added that one of the impacts of droughts on coffee growers is that younger farmers worried about the future are considering leaving the business. 'In coffee farming families around the world, it's a tough life, and the current generation is showing reticence to take off where their parents began,' he said.
Regardless of whether the U.S. imposes prohibitive tariffs on individual coffee-growing countries, climate change is already taking a toll on this workforce. 'Everyone's looking for a solution for this,' said Mullin, who believes robusta beans can offer a drought-resistant alternative to the ever-popular arabica beans.
Copper Cow has even started experimenting with a lesser-known varietal of coffee beans called liberica, which requires even less water to grow than robusta beans. 'And it's delicious,' Mullin said. It's an extremely labor-intensive crop because the coffee plant grows so tall, but one of the farmer cooperatives she works with is starting to plant them now, thinking the investment will be worth it as temperatures keep rising.
This new era of environmental, economic, and geopolitical challenges has shaken coffee brands. 'Everybody's wondering, in 50 years, will there be much coffee anymore? People are trying to be really realistic about what that world is going to look like,' said Mullin. In the midst of that broader uncertainty, the impact of Trump's tariffs is another question only time can answer.
This article originally appeared in Grist at https://grist.org/food-and-agriculture/coffee-expensive-climate-change-trump-tariffs-brazil-vietnam/. Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at Grist.org.