Need a cup of joe this morning? Enjoy it while you can

by Anuradha Raghu and Nguyen Dieu Tu Uyen

Coffee in the US risks getting even more expensive as President Donald Trump’s sweeping tariff measures hit Vietnam, one of its biggest suppliers, with hefty levies.

The Southeast Asian nation is the world’s leading producer of robusta coffee, the variety used in instant drinks and espressos. The 46% tariff on its goods — among the highest of the rates Trump imposed against US trading partners — risks disrupting flows to a major consumer and comes as coffee costs have already soared on the back of harvest shortfalls.

New York futures for arabica, the other major variety, have held near a record high after adverse weather in key growing regions. The tight supply also pushed robusta futures in London up more than 40% over the past year.

“The tariffs will likely add to coffee market volatility and could exacerbate existing supply tightness,” said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova Pte. in Singapore. “US coffee prices could rise, especially for robusta-based products.”

Nguyen Nam Hai, chairman of the Vietnam Coffee and Cocoa Association, said he was “stunned” to see such a high tax rate against the nation. “Everyone is worried, especially about the signed export contracts,” he said by telephone. 

Still, the country ships a lot to other regions like the European Union, helping to temper the impact. 

But for US buyers, alternatives are limited, with Vietnam its third-biggest supplier. Although some importers may try to increase purchases from Brazil, Indonesia and Ivory Coast, those countries cannot fully replace Vietnam’s high volume and consistent quality, Sachdeva said. And, some of them were hit by steep tariffs, too.

Switching to arabica may also not be viable as robusta is critical for instant coffee and espresso, she said. The tariffs will make it “even harder for US buyers to secure affordable robusta, leading to potential shortages,” she said.