Santa Cruz coffee shops weigh impacts of Trump tariffs

The coffee industry is already dealing with fallout from the 10% universal tariffs that went into effect earlier this year,

Things could get worse with the White House slamming a 50% tariff rate on imports from Brazil, the worlds biggest coffee exporter.

Those tariffs take effect August 1.

Joel Estby co-owns 11th Hour Coffee in Santa Cruz with his brother Brayden.

He said tariffs are putting a strain on what was already shaping up to be a volatile year for the coffee industry.

“Weather across the world been a little weird last, last year. So harvests have been a lot lower. Which threw a wrench into things before the tariffs even hit the equation. And now we're seeing a lot of increases as well just from the tariffs though.”

And now he and other coffee shop owners are paying more along the supply chain

“We've noticed the last probably two months, like, a steady ramping up of prices, as you know, if you were paying $4 for a coffee per pound last year, just with the 10% flat tariff, you're at $4.40 if the importer doesn't charge you more on top of that for their own costs,” he said.

This week, President Trump slapped a 50 percent tariff on Brazilian goods. It's the highest rate for any country.
With Brazil exporting a lion’s share of coffee to the US, everybody in the industry will feel the effects.

The Estby brothers are considering offloading some costs to coffee drinkers.

“I think that temporary fee does make sense in this instance, at least for the time being. But yeah, we're still debating whether we want to go that route or just raise our prices and then decrease them after the fact," said Joel Estby.

11th Hour competitor Cat & Cloud raised prices by 3.5%. They came right out, letting customers know why with a sign next t the register.

"I think it's like kind of a cool political statement. I don't think, a lot of people actually fully understand how tariffs work. I think there's still this thought process that the other countries paying for the tariff, and that's definitely not the case," said Estby.

Cat & Cloud’s owner didn’t respond for comment, but their website says they’re hand’s been forced and apologizes to customers.

“Honestly I think it's kind of ridiculous the way that tariffs are making everything more expensive and it makes things less affordable so you know, consumers aren't able to afford things that we used to be able to afford,” said customer Sophia Qarneri.

Estby said unless the reality is drastically different than expected, it will be unsustainable to not raise prices.

Customers said a price hike of a few percentage points isn’t gonna stop them from getting their fix, and owners like the Estby brothers are hoping a future price hike stays in that range. However they’ll have to wait to see how much the whopping taxes on Brazilian imports push things at the coffee counter, and they might not know until after the beans that have already been imported are sold off.