^{Source: Euronews.com}

The U.S. coffee industry is bracing for potential price hikes as the Trump administration's tariff policies create uncertainty for importers. Margaret Nyamumbo, founder of Kahawa 1893—a coffee company with $3 million in annual sales—expresses concern over the financial strain tariffs could place on businesses sourcing beans from African nations.​

Kahawa 1893: A Mission-Driven Business

Established in 2018 by Kenyan native Margaret Nyamumbo, Kahawa 1893 sources coffee beans from Kenya, Rwanda, Tanzania, and the Democratic Republic of Congo. The company emphasizes supporting female farmers, allowing customers to tip growers directly via QR codes on packaging. In 2023, Kahawa 1893 reported over $3 million in sales.​

Tariffs and Their Potential Impact

The Trump administration's recent tariff announcements have created a volatile environment for coffee importers. While countries like Vietnam face tariffs up to 46%, African nations currently see a baseline 10% tariff. However, the status of the African Growth and Opportunity Act (AGOA), which previously allowed tariff-free imports from African countries, remains uncertain as it approaches renewal in September.​

Nyamumbo notes that even a 10% tariff can significantly impact the coffee industry, which operates on thin margins. "Coffee is a low-margin business as a commodity," she explains. "So 10% is sometimes the margin that someone on the supply chain gets."​

Broader Industry Concerns

The National Coffee Association (NCA) reports that only 1% of coffee consumed in the U.S. is domestically grown, making the industry heavily reliant on imports. Tariffs on countries like Canada and Mexico, which supply a significant portion of roasted and instant coffee, could further disrupt the supply chain.​

Bill Murray, President & CEO of the NCA, states, "The added uncertainty surrounding cross-border commerce makes it difficult for our members to plan ahead." The NCA has formally requested that the administration exempt coffee products from these tariffs, emphasizing the potential harm to American consumers and small businesses.​

Consumer Implications

As importers face increased costs, these expenses are likely to be passed on to consumers. Nyamumbo warns that customers may encounter higher prices or lower-quality coffee as companies adjust to the new economic landscape. "Customers may start to see low-quality coffee in the market, just because roasters may be trying to manage their costs," she says.​

With specialty coffee prices already nearing $10 per cup in some areas, further increases could lead to decreased demand. "A latte is already approaching $10, and people are complaining," Nyamumbo observes. "It's going to be difficult to raise it much more without seeing demand destruction."​

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The coffee industry faces a challenging period as tariff policies evolve. Importers like Kahawa 1893 must navigate these changes while striving to maintain quality and affordability for consumers. The coming months will be crucial in determining the long-term impact on both businesses and coffee enthusiasts nationwide.

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