Coffee Tariff Crisis
A Conversation with James Weldon of Dancing Moon Coffee Company
A coffee business buyer regards wholesale price sheets at a storage facility
Coffee lovers across the United States are reeling from the first tariffs in history imposed on coffee by the federal government, and many are asking themselves: what does this mean for the price of my daily cup?
The coffee industry, already struggling with production shutdowns and significantly higher green coffee prices, now faces a new challenge with the addition of these tariffs. Are trickle-down price hikes coming for the consumer? If so, how can coffee companies and consumers navigate these turbulent waters?
To help answer these questions, I had the pleasure of speaking with James Weldon, CEO of Dancing Moon Coffee Company, who shares his perspective on the situation and what it means for coffee drinkers, based on over 50 years in the business.
Wichman’s World: James, thank you for joining us today. As you know, the recent tariff announcements have caused quite a stir in the coffee industry. Could you give us some background on what exactly is happening and how it’s impacting your business?
A woman picks coffee cherries on a farm in Costa Rica
James Weldon: Sure, Alex. On April 2nd, the Trump administration announced the implementation of new tariffs on a broad range of imported goods, including coffee beans. The reaction was immediate. Alarmist headlines, indignant tweets, and even memes about $15 cappuccinos started circulating.
At first, many of us in the industry thought this could be the final nail in the coffin after having already dealt with the aftereffects of the COVID shutdown followed by a dramatic increase in the cost of unroasted or green coffee, due to weather-related issues in the world’s two biggest producing nations: Brazil and Vietnam. Minimizing the effect on end users has made the past few years some of the toughest we’ve encountered.
The tariff schedule published by Washington hit unroasted coffee beans with surcharges ranging from 46% on Vietnamese coffee to 10% on most of the coffees from Central and South America. This is the first time in history that tariffs have been applied coffee beans. While it’s clear that U.S. consumers are already feeling the pain, the big question is: will coffee prices continue to rise, or is there hope for a leveling out at least near-term?
Wichman’s World: That’s definitely the million-dollar question. With coffee being such a vital part of daily life for so many people, it’s easy to understand the panic in the air. What advice would you give to consumers who are concerned about even higher prices at their local cafes or for their at-home brews?
Unroasted green coffee beans are stored upon import at a facility in California
James Weldon: I totally get the anxiety. Coffee, especially single origin specialty coffees like mine, are one of the few affordable luxuries in our daily lives. Given the turbulence I just referenced, I’m advising our customers to take a deep breath and avoid overreacting. Yes, there will likely be some continued upward pressure on both wholesale and retail prices, but it’s important to remember the market has in the past readjusted itself and I believe it will do so again soon.
Equally important, coffee cannot be easily “reshored.” Most of the US lies north of the growing zone for most coffee. The only domestic coffee production comes from Hawaii and Puerto Rico. However, combined they only account for less than 1% of what Americans consume. And, unlike many other products, it’s not like we can suddenly start growing coffee say, in hot houses. Even if we could, it takes a tree at least 5 years to yield usable beans.
So, what should we do in the face of likely price increases as tariffs are imposed and unfriendly environmental conditions continue? First, we must all remember that coffee is global commodity. The good news is that already efforts are underway from all over the world to have coffee declared an essential commodity and thus exempted from tariffs altogether. Even if that doesn’t happen, disruptions in the supply chain worldwide due to adverse weather or labor and political will likely dwarf the effect tariffs have on consumers’ coffee habit.
A farmer roasts green coffee beans using traditional methods on a plantation in Vietnam
While it’s a bit too early to say exactly what the long-term effects will be, we’re advising our customers to consider laying in some extra coffee for the short term to tide them over until conditions calm down. As most packaged coffee stays fresh for at least 26 weeks after roasting and packing, freshness should not be an issue. In the interim, we should be better able to understand how the global supply chain is adjusting and whether as with past sizable run-up in prices, coffee drinkers will switch to alternates like tea or continue to indulge themselves on quality coffee.
Wichman’s World: That’s a great point. Stockpiling a little extra coffee could certainly provide some peace of mind. But what about the long-term outlook? How are weather conditions in key coffee-growing regions like Brazil and Vietnam affecting the situation?
A coffee roaster inspects a sample from a batch of beans before packaging
James Weldon: As I said, weather conditions have been and continue to be a huge factor in the availability and quality of coffee. If key growing areas like Brazil and Vietnam continue to suffer from adverse weather, there is no question both yields and quality will suffer. How great the impact of the uncontrollable will be is anyone’s guess.
If one adds to that the impacts of rising labor costs and supply chain disruptions plus fluctuations in key currencies like the Brazilian Real and above all the US Dollar, we have the makings of continued projected nervousness. Against this backdrop the impact of tariffs seems comparatively little.
Wichman’s World: It sounds like the situation is still evolving, but there are some strategies consumers can use to manage through it. Any final thoughts on how we can stay calm and continue to enjoy our beloved coffee?
A consumer checks labels on whole bean coffee in a grocery outlet
James Weldon: Yes, as the British used to say, “Stay Calm & Carry On!” That’s my main advice, We‘re all in this together, and while the immediate outlook is to pay a little more for our daily cup(s) of coffee, it’s important to remember that this is resilient. We’ve weathered tough times before, and we’ll adapt again.
In the meanwhile, I’d encourage consumers to keep supporting their local coffee shops, roasters, and above all to minimize the shock to their wallets by buying a bit more coffee to tide them over at home until market conditions improve. After fifty plus years in this business I am confident that with time, the market will adjust, and we’ll get back to enjoying great coffee without it breaking the bank.
Wichman’s World: Thank you for your insights, James. It’s reassuring to hear that the coffee industry is taking a measured approach and looking out for consumers while working through these challenges.
Women enjoy their favorite brews at a coffee shop
James Weldon: Thanks for having me, Alex. Again, at the risk of sounding like a broken record, we’ll get through this, one cup at a time!
While the situation remains fluid, it’s clear that coffee lovers will need to adapt at least short term. Whether that means stockpiling a little extra coffee at home or adjusting to hopefully small price increases out of home, staying informed and supporting the coffee industry will help ensure that our daily brew will remain a source of comfort and joy.
So, for all the coffee enthusiasts out there, pleases keep brewing, stay calm, and enjoy your coffee. As we end, even in the face of rising costs, there is nothing finer than a cup of freshly brewed quality coffee like those roasted by Dancing Moon first thing in the morning, and all day long.
