STiR coffee and tea magazine

26 STiR coffee and tea | 2025 Quarter 2 Summer (Jun/jul/Aug) These market adjustments come at an already challenging time for the coffee industry, which has been navigating historically high prices due to climate change-induced supply shortages in major producing regions. Murray of the NCA has advocated for coffee exemptions, high- lighting the industry's economic importance and unique status as an essential import. Some economists support the administration's approach as part of a broader strategy. Treasury Secretary Scott Bessent said during his confirmation hearing, "The goal of tariffs is to in- crease US industrial capacity, create and protect US jobs, and to protect our national security by ensuring our supply chains, particularly for our military, are not reliant on our adversaries." Businesses are adapting differently based on their size, re- sources, and market position. While some small companies re- port existential challenges, larger players like Starbucks leverage global supply chains to mitigate impacts as they navigate the new trade environment, an advantage unavailable to smaller op- erators who lack the scale and resources for such flexibility. Navigating Uncertainty: The Path Forward The coffee industry approaches a pivotal moment where eco- nomic policy, consumer preferences, environmental concerns, and global relations converge. The 90-day pause provides a window for negotiation and adaptation, with differing views on what may follow. The administration has emphasized that tariffs can be modi- fied based on how trading partners respond. The White House fact sheet notes that President Trump has the authority to "de- crease the tariffs if trading partners take significant steps to remedy non-reciprocal trade arrangements and align with the United States on economic and national security matters." This creates both uncertainty and opportunity for producing coun- tries seeking to maintain access to the valuable US market. Some economists project significant economic downsides. JPMorgan has increased its odds of a US and global recession to 60%. The libertarian Cato Institute warned that tariff lev- els were approaching those of the 1930 Smoot-Hawley Tariff Act, drawing historical parallels that many industry veterans find troubling. However, administration supporters project positive out- comes. The president has stated that tariffs are "going to give us growth" and has framed them as a way to help the government rely less on income taxes for revenue. Some supporters sug- gest tariffs could help restore American manufacturing capacity, which they view as vital for national security and economic sov- ereignty in an increasingly fractured global system. The Delicate Balance The coffee industry now navigates competing priorities: sup- porting international trade relationships that provide essential imports, addressing trade imbalances that concern policymak- ers, maintaining affordable prices for consumers, and ensuring the long-term sustainability of the entire supply chain from farm to cup. National security dimensions add complexity and weight to what might otherwise be purely economic considerations. The administration has framed industrial capacity as a security con- cern, arguing that what began as economic decline becomes a security liability exposed during military conflicts. As the Center for Strategic and International Studies notes, some in the admin- istration believe "the 'arsenal of democracy' has been allowed to rust, while China has assembled the very industrial capacity that once defined US strength." As the coffee industry navigates these crosscurrents, adapt- ability and innovation are more necessary than ever. Whether through advocating for exemptions, exploring domestic pro- duction possibilities, diversifying export markets, creating new technological solutions to old problems, and innovating in product offerings, the industry must continue to demonstrate resilience in the face of shifting trade policies. Like so many aspects of our interconnected global econo- my, the story of coffee tariffs is still being written—cup by cup, trade deal by trade deal, policy by policy. Hold on tight—the future will be interesting! Hawaii, Puerto Rico, and niche California farms currently produce less than 0.1% of the global supply, with domestic production valued at approximately $54.3 million in Hawaii as of 2019/2020. Photo courtesy Nico Smit

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