Coffee is one of the world’s most traded commodities, and for millions of people in the US, it is also part of their daily routine. However, that routine may soon become more expensive.

US president Donald Trump has recently put forward a 50% tariff on Brazilian imports, planned to take effect on 1 August – a move that could have significant consequences for coffee prices across the country. Given Brazil’s dominant role in global coffee production, this policy could affect everyone from small independent cafés to major chains like Starbucks.

Brazil is the world’s largest coffee producer, accounting for approximately 35% of all coffee produced in the world, and the US is one of its primary buyers. In 2024, the US imported nearly $9 billion worth of coffee, a significant share of which came from Brazil. A tariff of this magnitude could sharply increase import costs, which would likely cascade through the supply chain – from importers and roasters to retailers – placing pressure on margins across the industry.

Shifting market dynamics

According to GlobalData, the tariff could prompt Brazilian coffee exporters to pivot toward alternative markets such as China and the Philippines. "Brazilian coffee exporters should seek alternative markets to the US in the event that the US acts on its threats," said Rory Gopsill, senior consumer analyst at GlobalData. "They need to target the alternative markets that combine high absolute forecast growth with a high compound annual growth rate (CAGR) to reflect a large, fast-growing coffee market. The Philippines and China offer both."

GlobalData’s Segment Insights Database highlights that:

• The Philippines was the world’s fifth-largest hot coffee market in 2024, projected to grow by $1.8 billion between 2024 and 2029 at a 5% CAGR. Its ready-to-drink coffee sector is also expected to grow by $264.8 million, with a CAGR of 11%. 

• China, currently the seventh-largest hot coffee market, is forecast to grow by $1.6 billion during the same period, with its ready-to-drink coffee segment expanding by $1.9 billion globally, the second highest absolute growth worldwide. 

Brazil is well-positioned to benefit from these markets, already supplying 32.4% of China’s total coffee imports in 2023, according to The Observatory of Economic Complexity.

Implications for the US supply chain

For the US coffee industry, a 50% tariff would mean significantly higher input costs. Small and mid-sized roasters, many of which rely on Brazilian arabica, may face challenges in maintaining competitive pricing without squeezing margins.

Although alternative sourcing from Colombia or Vietnam is possible, these producers cannot match Brazil’s combination of volume and cost efficiency. The result could be a broad price increase across the US market, affecting both retail and foodservice operators.

At the same time, Brazil could benefit by selling more coffee to China and the Philippines, markets that are growing fast and may offer better opportunities in the future.