US coffee drinkers face pricier cup as tariffs hit key supplier

Anuradha Raghu, Nguyen Dieu Tu Uyen and Maddie Parker, Bloomberg News on Apr 3, 2025

By clicking submit, I authorize Arcamax and its affiliates to: (1) use, sell, and share my information for marketing purposes, including cross-context behavioral advertising, as described in our Privacy Policy , (2) add to information that I provide with other information like interests inferred from web page views, or data lawfully obtained from data brokers, such as past purchase or location data, or publicly available data, (3) contact me or enable others to contact me by email or other means with offers for different types of goods and services, and (4) retain my information while I am engaging with marketing messages that I receive and for a reasonable amount of time thereafter. I understand I can opt out at any time through an email that I receive, or by clicking here

Coffee in the U.S. risks getting even more expensive as President Donald Trump’s sweeping tariff measures hit Vietnam, one of its biggest suppliers, with hefty levies.

The Southeast Asian nation is the world’s leading producer of robusta coffee, the variety used in instant drinks and espressos. The 46% tariff on Vietnam’s goods — among the highest of the rates Trump imposed against U.S. trading partners — threatens to disrupt flows and comes as coffee costs have already soared on the back of harvest shortfalls.

New York futures for arabica, the high-end variety used in coffee shops, have held near a record high after adverse weather hit key growing regions. Supply shortfalls also pushed robusta futures in London up more than 40% over the past year.

On Thursday, the most-active contract for robusta fell as much as 2% when markets opened before paring those losses, while arabica futures also declined.

“The tariffs will likely add to coffee market volatility and could exacerbate existing supply tightness,” said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova Pte. in Singapore. “U.S. coffee prices could rise, especially for robusta-based products.”

Nguyen Nam Hai, chairman of the Vietnam Coffee and Cocoa Association, said he was “stunned” to see such a high tax rate against the nation. “Everyone is worried, especially about the signed export contracts,” he said by telephone.

Still, the country ships a lot to other regions like the European Union, helping to temper the impact.

While there has been an incentive to use the cheaper robusta variety, the world’s top arabica grower Brazil has been hit by a lower 10% baseline tariff. That potentially makes arabica a more appealing option, said Steve Wateridge, head of research at TRS by Expana.

“The fact that all the main arabica producers seem to be at a 10% tariff rate, whereas Vietnam and Indonesia are much higher, there may be a change in the flow as there’s an incentive to use more arabica or Brazilian Conilon,” he said.

But for U.S. buyers, alternatives are limited, with Vietnam its third-biggest supplier. Stocks in the U.S. already have little room for further drawdowns and will likely remain low with the tariffs in place, said Daryl Kryst, vice president of Soft and Agricultural Commodities Asia for StoneX Group Inc.

Although some importers may try to increase purchases from Brazil, Indonesia and Ivory Coast, those countries cannot fully replace Vietnam’s high volume and consistent quality, Sachdeva said. And some of them were hit by steep tariffs too.

Switching to arabica may also not be viable as robusta is critical for instant coffee and espresso, she said. The tariffs will make it “even harder for U.S. buyers to secure affordable robusta, leading to potential shortages,” she said.