https://finance.yahoo.com/news/us-coffee-prices-spike-due-203207154.html
How much are you willing to pay for coffee? To what extent can business owners continue profiting on this non-essential good in spite of tariffs? Unfortunately, tariffs on Brazil, Colombia, Vietnam have contributed to an astonishing annual 19% increase in instant coffee since September 2024. According to the article, 99% of coffee is imported to the United States. Trump commented that some "unavailable natural resources” may be exempt from the tariffs, but coffee has not been brought to discussion.
Many manufacturing companies that are relocating to the U.S. have the ability to produce, regardless of climate. The contrary can be said about coffee bean manufactures, as the plants only thrive in a naturally warm and humid environment. Therefore, the cafe business is not as agile. Consumer prices are rising, reflected in the most recent CPI release. The CPI lacks substitution data, which could be prevalent in this situation. Consumers may substitute with other sources of caffeine, like energy drinks. Consequently, inflation data derived from the CPI may underestimate real behavioral changes in consumer spending.
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