{"id":19868,"date":"2025-08-25T12:08:54","date_gmt":"2025-08-25T12:08:54","guid":{"rendered":"https:\/\/finderica.com\/?p=19868"},"modified":"2025-08-25T12:08:54","modified_gmt":"2025-08-25T12:08:54","slug":"tariffs-are-coming-for-your-coffee-and-matcha","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=19868","title":{"rendered":"Tariffs Are Coming for Your Coffee (and Matcha)"},"content":{"rendered":"
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Nerd’s Eye View<\/span><\/h3>\n
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A weekly look at what’s new and trending in personal finance. <\/span><\/span><\/p>\n<\/div>\n

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Coffee prices are on the boil:<\/span><\/span> Two-thirds of American adults drink coffee every day, according to the latest annual report from the National Coffee Association (NCA), and we down an average of three cups daily. <\/span><\/p>\n<\/div>\n

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That adds up to hundreds of millions of cups each day, making it the most-consumed beverage in America, beating out bottled water, tea, juice and soda. <\/span><\/p>\n<\/div>\n

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Most of us brew it at home, but enough of us drink it on the run to keep more than 17,000 Starbucks, almost 10,000 Dunkin\u2019 Donuts and tens of thousands of other coffee houses afloat. Total economic impact of the coffee industry in the U.S. according to a 2023 NCA report: $343.2 billion, supporting 2.2 million jobs.<\/span><\/p>\n<\/div>\n

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The thing about coffee, of course, is that we don\u2019t grow it ourselves. In fact, less than 1% of what we consume is grown in the U.S., primarily in Hawaii and Puerto Rico, which lie within the tropical \u201ccoffee belt.\u201d No other part of the country is suitable for large-scale coffee production.<\/span><\/p>\n<\/div>\n

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That hasn\u2019t spared coffee from the <\/span>barrage of tariffs<\/span> unleashed in recent months by President Donald Trump. And those tariffs are knocking the coffee industry sideways, particularly the levy on Brazil \u2014 by far the world\u2019s biggest producer of coffee beans. Tariffs on imports from Brazil jumped from 10% to 50% on Aug. 6.<\/span><\/p>\n<\/div>\n

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We talked to coffee insiders for a <\/span>deep dive<\/span> on what tariffs are doing to the market, and the news for coffee drinkers isn\u2019t cheery. Virtually all coffee-producing nations are now subject to tariffs. Those tariffs are paid by importers, who pass them along to roasters, who will, in the end, pass them along to \u2026 you.<\/span><\/p>\n<\/div>\n

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This is on top of a steep climb in the retail cost of roasted coffee even before tariffs kicked in. Take a look. <\/span><\/p>\n<\/div>\n

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Price hikes in recent years are the result of droughts in Brazil and in another big producer, Vietnam. And those droughts have been tied to climate change, which is predicted to vastly change the coffee-growing landscape in the decades to come. <\/span><\/p>\n<\/div>\n

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Coffee yields are already falling around the world, and reports have projected that the area available for coffee production will be halved by 2050. <\/span><\/p>\n<\/div>\n

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So what\u2019s a coffee drinker to do?<\/span><\/span> Coffee, of course, comes in many forms, and many price points. And habits may already be shifting: the 2025 NCA report shows that 71% of coffee drinkers brewed their daily cups at home \u2014 compared to 63% in 2020. One of the roasters we talked to said he sees signs that consumers are shopping for sales more. <\/span><\/p>\n<\/div>\n

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Of course, there are alternatives to coffee \u2014 but they\u2019re subject to many of the same pressures. <\/span><\/p>\n<\/div>\n

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Matcha<\/span><\/span> \u2014 a green tea powder deeply rooted in Japanese tea ceremonies \u2014 is a social media staple and a growing cafe favorite across the U.S. <\/span><\/p>\n<\/div>\n

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But the combo of online hype driving demand and new tariffs hitting imports means prices are likely to rise \u2014 and soon. <\/span><\/p>\n<\/div>\n

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The already-pricey green tea leaves are grown mainly on small farms in Japan, where production is time-intensive \u2014 far more than most people realize. That makes it impossible to ramp up supply quickly and the few U.S. matcha growers won\u2019t be able to fill the gap. Matcha may seem like an indulgence now, but it\u2019s about to cost even more. <\/span>Read on<\/span>. <\/span><\/span><\/p>\n<\/div>\n

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In other beverage news: <\/span><\/span>The percentage of Americans who say they consume alcohol has fallen to the lowest level ever in 2025, according to the latest Consumption Habits survey from Gallup. And when you consider that Gallup has been conducting this survey since 1939 \u2026 well, that\u2019s saying something. <\/span><\/p>\n<\/div>\n

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In the 2025 survey, 54% of Americans reported drinking alcohol, down from 58% in 2024. Before that, from 1997 to 2023, that figure stayed above 60%. The previous all-time low was 55% in 1958, the bottom of a post-war lull in consumption. <\/span><\/p>\n<\/div>\n

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Peak drinking? That would have been 1974 to 1981, when all-time highs of 68% to 71% were recorded. <\/span><\/p>\n<\/div>\n

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Health concerns appear to be driving the decline. For the first time since Gallup started tracking perceived health effects of alcohol in 2001, a majority of those surveyed (53%) say drinking in moderation (one or two drinks a day) is bad for one\u2019s health. <\/span><\/p>\n<\/div>\n

Beyond beverages<\/span><\/h3>\n
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This week in tariffs:<\/span><\/span> On Thursday, the European Union and United States announced a framework for a new <\/span>trade deal<\/span><\/a>. Under the framework, which the two nations are still negotiating, the EU commits to eliminating tariffs on all U.S. industrial goods and giving preferential access for a variety of U.S. agricultural and seafood products. <\/span><\/p>\n<\/div>\n

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The U.S., in return, says it will apply \u201cmost favored nation\u201d or 15% baseline tariffs (whichever is higher) on EU aircraft and parts, cork, lumber, semiconductors, pharmaceuticals and certain natural resources. The U.S. may also lower auto tariffs to 15% contingent on EU legislative action. The worldwide 50% tariff on steel and aluminium remains in effect. <\/span><\/p>\n<\/div>\n

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In exchange, the EU says it will purchase $750 billion worth of U.S. energy and invest at least $40 billion in U.S. artificial intelligence chips for data centers. The EU also promises to invest $600 billion in strategic U.S. sectors by 2028 and purchase more U.S. military and defense equipment. <\/span><\/p>\n<\/div>\n

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Listen to our<\/span> Smart Money <\/span><\/span>tariff update.<\/span><\/p>\n<\/div>\n<\/div>\n

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The markets:<\/span><\/span> The major indexes were down most of the week, on disappointment over Walmart earnings and concerns about the state of the labor market and inflation. On Friday, however, markets bounced back strongly on <\/span>remarks from Fed Chair Jerome Powell<\/span> that boosted hopes for a rate cut in September. Meanwhile, investors await quarterly earnings next week from <\/span>Nvidia<\/span> \u2014 currently the world\u2019s most valuable company by market capitalization. <\/span><\/p>\n<\/div>\n

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Upcoming consumer data releases <\/span><\/span>(from SS senior economist Elizabeth Renter)<\/span>: <\/span><\/span><\/p>\n<\/div>\n

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