in the crosshairs  According to the US Department of Agriculture, the country imports roughly 80 per cent of its unroasted coffee from Latin America, with Brazil supplying more than a third of the total in 2023. The new tariff has landed on top of record commodity prices, pushing the average retail cost of a pound of ground roast to US$8.13 in June, up from $6.25 a year earlier and $4.52 in 2020, according to the Bureau of Labor Statistics. For small roasters, the timing could hardly be worse. “We’re at an inflection point,” said Dan Hunnewell, co-founder of Coffee Bros. “Highly desirable coffees are arriving just as tariffs, rising costs and global instability hit hardest. Small roasters are being forced to choose between raising prices or compromising on quality just to survive. “And it’s not just coffee. Most of the essential goods for cafes and roasters, from paper products and retail bags to filters, aren’t manufactured domestically. Even US-based packaging suppliers often rely on raw materials sourced from countries like China. The supply chain pressure is real and far-reaching.” The US specialty coffee community has rallied behind Coffee Bros’ call for action, with more than 10,000 signatures collected in support of the petition to exempt coffee from US tariffs. “Coffee can’t be grown at scale in the US, and treating it like it can under trade policy is both harmful and shortsighted,” said Hunnewell. “This isn’t just about our business. It’s about protecting a global network of producers, roasters and communities that rely on one of the world’s most important agricultural products.” New Orleans-based coffee chain French Truck Coffee recently announced a temporary 4 per cent tariff surcharge on all online orders, explaining the decision will allow it to continue sourcing high-quality beans without raising base prices.  Last month, the chairs of the United States Congressional Coffee Caucus, Democrat Jill Tokuda and Republican William Timmons, issued a joint letter calling for the removal of all existing and future tariffs on coffee.   “The coffee industry supports more than 2.2 million American jobs, generates over $100 billion in wages, and contributes an estimated $343 billion in economic output per year,” the letter said. “Every $1 of imported coffee creates an estimated $43 in value throughout the supply chain, and coffee shops, roasters, and distributors.”  Brazil looks East As Brazilian coffee farms are likely reluctant to lower prices, increased US tariffs may push many producers and coffee exporters from the South American country to expand their supply agreements in Asia. China has become a fast-growing buyer, authorising nearly 200 Brazilian companies to export coffee to its domestic market. Last year, China’s largest coffee chain Luckin Coffee signed a $1.38 billion supply deal with ApexBrasil. Following the deal, Chinese beverage chain Mixue agreed to purchase $556.3 million worth of Brazilian coffee.  For Brazil, redirecting exports to Asia reduces exposure to the US market. For China, it secures supply for a coffee market that has expanded rapidly in recent years and positions the country as a major consumer in a commodity sector traditionally dominated by Western demand. And for the US, the shift could mean fewer options, tighter supply and a structural increase in coffee prices. These effects may outlast the current tariff policy. Once Brazilian exporters lock in long-term contracts with Asian buyers, winning them back could prove costly, if not impossible. The wider domino effect  The coffee dispute is part of a broader tariff wave hitting the food and beverage industry. “Restaurants depend on a steady, year-round supply of fresh ingrained ingredients to serve millions of customers daily,” Sean Kennedy, executive VP of public affairs at the National Restaurant Association, said in a letter to the US Trade Representative.  “Because many essential food products can’t be grown in the US year-round, we rely on global supply chains to maintain quality, affordability and consistency. Tariffs on these critical imports would disrupt supply chains, drive up costs of operators and ultimately lead to higher menu prices for customers.”  According to the association’s calculations, a 30 per cent tariff on food and beverage products from Mexico and Canada, many of which can not be grown or produced domestically, would cost America’s restaurants $15.16 billion. Meanwhile, higher menu prices would translate into a 35 per cent profit loss for the average small restaurant operator.  Michelle Korsmo, the association’s CEO, said that many owners will have no choice but to pass the costs on to customers.  “Fewer people dining out jeopardises an industry that supports millions of jobs and local economies,” she warned.  ‭Further reading: How tariffs could derail Under Armour’s brand rebuild.