NEW YORK (CNN) — Coffee drinkers are in for a jolt long before their first sip.
Retail coffee prices in the United States in August jumped nearly 21% compared to the same month last year — the largest annual jump since October 1997, according to the latest Consumer Price Index, released Thursday. On a monthly basis, coffee prices rose 4%, the most in 14 years.
Coffee drinkers have President Donald Trump’s tariffs to blame, in part. The United States is largest importer of coffee in the world and it relies on foreign countries for the beans, given there are very few places it can grow domestically. Nearly all – 99% – of coffee consumed in the United States is imported, according to the National Coffee Association.
One of the most heavily-tariffed countries is Brazil, which is the United States’ top source for coffee, according to US Department of Agriculture data. Brazilian imports face 50% tariffs, among the highest that the US levies on any country’s goods, because of Trump’s anger over the trial and recent conviction of former President Jair Bolsonaro, a Trump ally.
Diane Swonk, chief economist at KPMG, predicts coffee prices “will easily exceed the record as the full effects of the 50% tariffs levied on Brazil last month work their way onto store shelves.”
Other coffee bean-growing countries are also being slammed with tariffs. Colombia, the second-biggest exporter based on net weight, has a 10% tariff, and Vietnam, the third-biggest, has a 20% tariff.
Big brands and small shops have been trying to absorb the costs, but consumers’ luck with prices appears to have run out.
Folgers’ owner J.M. Smucker’s warned on its earnings call last month that it will likely hike coffee prices of its retail coffee products, which also includes Café Bustelo, for the third time this winter. It first raised prices in May and then again in August.
In New Orleans, a local chain called “French Truck Coffee” has added a 4% tariff surcharge on orders to offset the rising prices.
However, Starbucks is a holdout for now. The company said on its July earnings call that because of its buying practices, “coffee tariff impacts lag the market with year over year coffee cost increases expected to peak in the 2026,” executives said.
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