What Trump tariffs could mean for coffee importers

Along with investors, consumers and economists, Margaret Nyamumbo is keeping a close eye on President Donald Trump’s back-and-forth tariff policies, and for good reason. Her U.S.-based coffee company, Kahawa 1893, sources its beans from growers in Kenya, Rwanda, Tanzania and the Democratic Republic of Congo.

Nyamumbo, a native of Kenya, left her job in investment banking to found her company in 2018, driven, she says, by a desire to support female farmers in Africa. It’s a mission that’s resonated with customers, who can “tip” farmers from a QR code on each bag of Kahawa 1893 they buy. In 2023, the company sold more than $3 million worth of coffee, according to documents reviewed by CNBC Make It.

Kawaha 1893 is hardly the only U.S. coffee firm importing its beans — just 1% of the coffee Americans drink comes from domestic growers, according to the National Coffee Association.

Nyamumbo expects some price disruption in the global supply chain that starts with coffee farms and ends with a barista making you a cappuccino. How much disruption, she says, depends on factors such as international trade agreements, corporate cost-cutting, commodity speculation and where tariffs ultimately settle. Everything is currently up in the air.

If tariffs stay where they are, though, and African products don’t get an exemption, the math gets difficult for businesses like Nyamumbo’s. “We’re going to have to raise prices,” she says.

The administration has since temporarily rolled tariffs on dozens of countries back to the 10% mark, but even that could be onerous on coffee businesses like hers, says Nyamumbo.

“[A tariff of] 10% is huge. Coffee is a low-margin business as a commodity,” she says. “So 10% is sometimes the margin that someone on the supply chain gets.”

The new policies mark an abrupt and confusing shift for Kahawa 1893 and other businesses that import goods from Africa, Nyamumbo says. U.S. trade with Africa was previously tariff-free under the African Growth and Opportunity Act, a trade deal aimed at boosting developing African economies.

It’s unclear whether the new tariffs supersede AGOA, which is up for renewal in September. It’s a waiting game for importers of African coffee, which will see its next major harvest in the fall.

“We’re hoping by then there’s gonna be some resolution,” Nyamumbo says. “I think a lot of people are crossing fingers that we’ll get that exception.”

Some trade advocates say there’s some reason for pessimism on that front.

“There is no indication that imports under AGOA are exempt from the 10% tariffs, so it appears that effectively immediately AGOA imports that previously were duty-free are now subject to a 10% duty,” the Washington-based African Coalition for Trade said in a memo to members earlier this month. “This is obviously not a positive sign for the outlook for renewal of AGOA.”

The U.S. and Chinese governments have been in an escalating trade war since Trump’s announcement, with the U.S. now charging tariffs of up to 245% on certain Chinese products.

For now, Nyamumbo’s suppliers tell her they’re doing everything they can to defray her costs as an importer. She posits that they may look to reroute their shipments through other countries to lower the tariffs customers eventually pay. Still, her costs are likely going up, she says.

Across the board, she says, the tariffs will likely shake up the way coffee is shipped. For instance, more Vietnamese coffee may be heading to Europe and more African coffee may be coming to the U.S. “That volatility in the supply chain is likely to cause prices to increase,” Nyamumbo says.

Companies may have to get creative in order to digest those higher prices and maintain profitability, she says, either in the materials they use or the end product they produce.

“Customers may start to see low-quality coffee in the market, just because roasters may be trying to manage their costs,” she says. “It’s gonna be kind of tricky, being able to get the right quality at the price that people are used to.”

The alternative, she says, is that you’re going to be paying more for a cup of coffee. How much the consumer can tolerate will likely dictate who can stay in business, and for how long.

“How much more can we raise [prices]? A latte is already approaching $10, and people are complaining,” Nyamumbo says. “It’s going to be difficult to raise it much more without seeing demand destruction.”

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