Skip to content Skip to Content

Coffee prices are rising, despite Trump’s canceled tariff on Colombia

By Vanessa Yurkevich, CNN

New York (CNN) — Coffee prices hit a new high Monday, the day after President Donald Trump threatened – and then reversed course on – a 25% tariff on Colombia during a spat about deportation flights from the US. And the price is still rising.

Even though the tariff never went into effect, the mere threat sent nerves racing throughout the coffee market.

Colombia is the third largest coffee-producing country in the world, behind Brazil and Vietnam.

Futures contracts for Arabica coffee produced in Latin America and traded on the Intercontinental Exchange jumped from a closing level of $3.48 a pound on Friday to $3.49 a pound on Monday, a 0.5% increase. By mid-day Tuesday coffee futures moved even higher, to $3.53 a pound, a 1.7% increase from Friday.

“When President Trump even makes threats about tariffs, the minute you introduce uncertainty into a global trade system, and that’s what global trade is, things are going to get a little crazy,” said Dan Gardner, the president of Trade Facilitators, a supply chain, trade, and logistics company.

But President Trump didn’t send the price of coffee soaring by himself. Arabica coffee prices surged by 13% in December, a 60% year-over-year increase, according to the World Bank.

And coffee futures have been elevated since 2011 as bad weather has plagued key coffee growing regions like Brazil and Colombia. And the region’s next crop isn’t expected to produce a bigger yield.

“The market just hasn’t really caught a break. The supply has been improving, but still not enough to meet with demand. There has been a growing realization that the impacts will be worse than people were originally thinking,” said Ryan Delany, the chief analyst at Coffee Trading Academy, which focuses on the global coffee market.

The US isn’t a coffee producer, expect for some production in Hawaii. The US imports most of its coffee, and US consumers tend to prefer Colombian coffee.

The US imported nearly $9 billion worth of coffee and coffee products from across the globe last year, not accounting for December, according to Census Bureau trade data. Colombia was the second-highest coffee-exporting country to the US, shipping $1.4 billion worth of it last year through November. (Brazil was the top exporter.)

Starbucks, Nestle and Keurig source a lot of coffee from Colombia, said Gardner. But they lock in prices years in advance, so consumers often don’t feel price increases right away.

But as more and more deportation flights head to Latin America, President Trump could threaten tariffs once again. And just that threat has already spooked exporters and importers – just enough to hedge.

“Companies, because they know that the average American doesn’t understand how this stuff really works, they’ll start increasing prices, maybe not all at once, but little by little. So, they’ll have a little cash reserve against when stuff starts coming in and facing those tariffs,” said Gardner.

With or without a threatened tariff, coffee prices are high and will likely continue rising.

“Coffee is one of those items that has seen rapid increases at the wholesale level that will probably be coming to the grocery store soon,” said Tyler Schipper, economist and associate professor at the University of St. Thomas in St. Paul, Minnesota.

“So people will have trouble separating tariffs that didn’t even pan out, versus what were the underlying price dynamics of coffee even before the Trump administration.”

The-CNN-Wire
™ & © 2025 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.

Elisabeth Buchwald and Alicia Wallace contributed to this report

Article Topic Follows: CNN - Business/Consumer

Jump to comments ↓

Author Profile Photo

CNN Newsource

BE PART OF THE CONVERSATION

KVIA ABC 7 is committed to providing a forum for civil and constructive conversation.

Please keep your comments respectful and relevant. You can review our Community Guidelines by clicking here

If you would like to share a story idea, please submit it here.