Have you noticed the price of coffee is increasing? In the United States, coffee is almost like a ritual. Most people love it, and on average they drink three cups a day! But there’s a problem: coffee is getting much more expensive, and it’s not by chance.
Since the beginning of the year, the price of coffee has gone up one dollar per pound, and now it costs about $8.13 per pound. I’m sorry if you’re a coffee lover, but that’s just the beginning, because it could become even more expensive in the next few months. So, let’s see more in detail why this is happening.
What does Trump have to do with this?
President Donald Trump’s taxes on products coming from other countries is not a new thing. Now, he said he wants to put a 50% tax (that’s called a tariff) on products that come from Brazil, and that includes coffee. If that happens, the price will go up even more.
Why is that so important? Because Brazil is the biggest coffee producer in the whole world, and the United States buys a lot of Brazilian coffee.
Problems in the countries that produce coffee
Not only Trump’s decision is an issue for increasing coffee prices, but also the weather in those countries that produce this product. Let’s take the example of Brazil and Vietnam, which is the second country that produces the most Arabica coffee, which is the most popular in the U.S., have had two bad harvests in a row.
First they had droughts (very little rain), and then very heavy rains, which ruined the crops even more. All of this is related to climate change, which is affecting how many foods are grown, including coffee.
When there’s less coffee available, but more people want it, the price goes up. And if you also add a high import tax, the price goes up even faster.
The United States imports almost all of its coffee
Something very important is that the United States produces almost no coffee. Only Hawaii and Puerto Rico have the right climate to grow it. So 99% of the coffee people drink in the U.S. comes from other countries.
And of all that imported coffee, around 31% comes from Brazil. That means a huge part of the coffee sold in supermarkets, coffee shops, and restaurants comes from that country.
What will happen to the coffee we drink?
If that 50% tax is added to Brazilian coffee, the price increase will be felt first in the supermarket, when people buy coffee for home. But a few months later, it will also be noticeable in coffee shops like Starbucks or any other. Almost all cafés use Brazilian beans in their blends, so prices will rise there too.
An expert in economics said that this tax could “kill the market” for Brazilian coffee in the U.S. That means many places would stop buying it because it would be too expensive.
So, what does all this mean for you?
If you’re someone who enjoys a good cup of coffee every day, you’ve probably already noticed that it’s getting more expensive. At least now you know why. Between bad weather ruining crops, more people wanting coffee, and possible new taxes on Brazilian imports, prices are going up and might keep rising.
So next time you’re in line at the coffee shop or picking up a bag of beans at the store, remember: there’s a lot more behind that cup than just hot water and ground beans. What do you think about this Trump decision to increase import taxes to Brazil?