Donald Trump’s tariff threat: What a cup of coffee will now cost you

Aussies could be forced to pay even more for coffee with baristas fearing costs could nearly hit double digits as the US threatens the world’s largest bean producer with tariffs.

Aussie coffee drinkers could face a jump in the cost of their morning brew if America enforces its proposed 50 per cent tariff on Brazil, the world’s largest bean producer.

Tough climate conditions have already impacted the stability of coffee bean crops, pushing the global benchmark price for coffee – the Arabica – to its highest level in decades.

Small business owners, who have done their best to shield customers from the cost pressures in difficult economic times, say “subsidies” may soon become impossible.

“Big companies like the Lavazza’s of this world, the Starbucks, they buy big. People like us, people that feed the coffee industry … then pay top dollar,” Audie Gamra, the director of Caffe Bianchi – a specialty Australian coffee buyer, roaster and blender – said.

“We try to subsidise as much as possible. But there is a point where our kilo price has increased to the point where customers feel the pinch.”

Audie Gamra and Angelo Bianchi fear the average price of a flat white could hit $7.50 by the end of the year.

Mr Gamra, who has run the family Caffe Bianchi business for more than half a century, fears the average price of a flat white will hit $7.50 by the end of the year – well out of reach for some.

“A lot of coffee shops that we have supplied and that I know of in the industry … have gone to the wall, they have closed,” he said.

“Customers are not buying as much as they used to, they can’t sustain the $6 or the $7 or whatever it is.”

Single O, which has a chain of coffee stores in Australia and Japan, said the coffee industry had been through the wringer.

“We’re definitely seeing record high costs. And that’s also exacerbated by the, you know, the relative weakness of the Australian currency against the USD (American dollar),” Single O head of coffee Wendy De Jong said.

Still, Australia has some of the cheapest prices for coffee in the world at $5.42, according to research by Mandoe. Comparatively, a flat white in Switzerland costs $10.14, in Denmark the charge is $9.42, while Americans pay $8.42.

America’s proposed tariff on Brazil – which US President Donald Trump said would take effect from August 1 in response to the Brazilian government’s “witch-hunt” against its former president Jair Bolsonaro – shocked global commodities markets this week.

Arabica coffee futures on the Intercontinental Exchange rose to jumped to nearly $290 per pound – their highest level in a month.

“We thought of culling our range … but we buy from about 22 different plantations,” Mr Gamra said.

“We have blends that have lasted that length of time (35 years). We have customers that have lasted that length of time, but we see them suffering and we see them reducing their intake.

“It’s a point where it’s quite apparent in our sales figures. So it is hard for us.”

Martina Csonkova, cafe manager, and barista, MJ, at Single O, Surry Hills, fear coffee prices will rise. Picture: Justin Lloyd.

Ms De Jong said she thought America would bear the brunt of the tariffs implications.

“Tariffs are levied against importers in the United States. So that it will only impact United States importers,” Ms De Jong said.

“I think we’re a ways away from understanding what that knock on will be for countries that are not the United States.”

But Ms De Jong said “if prices continue to go up for coffee” local coffee businesses would adapt.

“I feel like we are going to just get more careful – every bean’s got to count,” she said.

“We’ll just have to really make sure. we’re just continuing to treat it like the very precious commodity that it is.”

Originally published as Donald Trump’s tariff threat: What a cup of coffee will now cost you