Business

U.S. coffee drinkers face pricier cup as tariffs hit key supplier

Published

5 days ago

April 3, 2025

Coffee in the US risks getting even more expensive as President Donald Trump’s sweeping tariff measures hit Vietnam, one of its biggest suppliers, with hefty levies.

The Southeast Asian nation is the world’s leading producer of robusta coffee, the variety used in instant drinks and espressos. The 46% tariff on Vietnam’s goods — among the highest of the rates Trump imposed against US trading partners — threatens to disrupt flows and comes as coffee costs have already soared on the back of harvest shortfalls.

New York futures for arabica, the high-end variety used in coffee shops, have held near a record high after adverse weather hit key growing regions. Supply shortfalls also pushed robusta futures in London up more than 40% over the past year.

On Thursday, the most-active contract for robusta fell as much as 2.5%, while arabica futures dropped as much as 3.1%. Both contracts pared most of those losses by the market settle.

“The tariffs will likely add to coffee market volatility and could exacerbate existing supply tightness,” said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova Pte. in Singapore. “US coffee prices could rise, especially for robusta-based products.”

Nguyen Nam Hai, chairman of the Vietnam Coffee and Cocoa Association, said he was “stunned” to see such a high tax rate against the nation. “Everyone is worried, especially about the signed export contracts,” he said by telephone.

Still, the country ships a lot to other regions like the European Union, helping to temper the impact.

While there has been an incentive to use the cheaper robusta variety, the world’s top arabica grower Brazil has been hit by a lower 10% baseline tariff. That potentially makes arabica a more appealing option, said Steve Wateridge, head of research at TRS by Expana.

“The fact that all the main arabica producers seem to be at a 10% tariff rate, whereas Vietnam and Indonesia are much higher, there may be a change in the flow as there’s an incentive to use more arabica or Brazilian Conilon,” he said.

But for US buyers, alternatives are limited, with Vietnam its third-biggest supplier. Stocks in the US already have little room for further drawdowns and will likely remain low with the tariffs in place, said Daryl Kryst, vice president of Soft and Agricultural Commodities Asia for StoneX Group Inc.

Although some importers may try to increase purchases from Brazil, Indonesia and Ivory Coast, those countries cannot fully replace Vietnam’s high volume and consistent quality, Sachdeva said. And some of them were hit by steep tariffs too.

Switching to arabica may also not be viable as robusta is critical for instant coffee and espresso, she said. The tariffs will make it “even harder for US buyers to secure affordable robusta, leading to potential shortages,” she said.

Other soft commodities also broadly fell, with the exception of New York cocoa prices that rose as much as 5.8% after the US announced tariffs on top grower Ivory Coast. Cotton futures dropped as much as 4.4% on fears of weaker demand, reaching its exchange limit. Orange juice prices, meanwhile, sank 6% intraday.

Robusta futures dropped 0.22% in London to reach $5,388 a ton, while arabica fell 0.93% in New York. New York cocoa rose 3.6% in New York, while London futures fell 1.4%. Cotton sank 4.4% in New York.

This story was originally featured on Fortune.com

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Business

Growing global trade war threatens to undermine maritime emissions-cutting talks in London

Published

7 minutes ago

April 8, 2025

Jace Porter

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Singapore says it’s ‘disappointed’ by Trump’s tariffs: ‘These are not actions one does to a friend’

Published

40 minutes ago

April 8, 2025

Jace Porter

U.S. President Donald Trump’s tariffs on Singapore are “not actions one does to a friend”, the city-state’s leader said Tuesday, adding the government will likely downgrade this year’s economic growth forecast.

Prime Minister Lawrence Wong warned that the “likelihood of a full-blown global trade war is growing” and urged his trade-reliant nation to prepare for difficult times ahead.

“We are very disappointed by the U.S. move, especially considering the deep and long-standing friendship between our two countries,” he said in an address to parliament.

“These are not actions one does to a friend.”

Trump last week announced sweeping levies on friends and foes alike after accusing the world of “ripping off” the United States for years.

Singapore was hit with a 10% tariff, despite a free-trade agreement (FTA) with the United States.

The rate is much less than those imposed on other countries.

But Wong said the trade-dependent nation will be particularly hurt by a slump in the world economy and the unravelling of the global trading system based on free trade.

“Singapore may or may not go into recession this year, but I have no doubt that our growth will be significantly impacted,” he said.

The trade ministry is reassessing its economic growth forecast this year of 1.0-3.0%”and will likely revise it downwards,” he added.

Wong said that under the U.S.-Singapore FTA, the city-state imposes zero tariffs on American goods. Singapore also runs a trade deficit with Washington.

“If the tariffs were truly reciprocal and if they were meant to target only those with trade surpluses, then the tariff for Singapore should be zero,” he said.

Singapore hosts thousands of U.S. companies and many of them have made the city their Asia-Pacific headquarters.

While the island-nation is not a U.S. defense treaty ally, it enjoys robust military ties with Washington.

“This marks a profound turning point,” he said.

“We are entering a new phase in global affairs, one that is more arbitrary, protectionist and dangerous.”

This story was originally featured on Fortune.com

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Budget airline Avelo will fly deportation flights for ICE—but carrier’s hometown mayor calls it ‘deeply disappointing and disturbing’

Published

1 hour ago

April 8, 2025

Jace Porter

Budget carrier Avelo Airlines signed an agreement to fly federal deportation flights from Arizona starting in May, according to the company, whose founder acknowledged the decision may be controversial.

Andrew Levy, also CEO of the Houston-based airline, said Avelo is flying for the U.S. Department of Homeland Security’s Immigration Control and Enforcement agency as part of a “long-term charter program” to support the agency’s deportation efforts. The company decided the move would help with expansion and protect jobs, he said.

“We realize this is a sensitive and complicated topic,” Levy said in a statement.

The domestic and international flights will be supported by three Boeing 737-800 planes and based at Mesa Gateway Airport, Avelo said in a statement.

In an online job listing for the Arizona operation, Avelo states that the “flights will be both domestic and international trips to support DHS’s deportation efforts.”

Tom Cartwright, a flight data analyst for the advocacy group Witness at the Border, whose social media feeds are closely watched in immigration circles, said he isn’t aware of any other commercial airlines that have provided such flights for ICE in the past five years he’s been tracking flights. He called the decision by Avelo “unusual” considering charter companies the public likely hasn’t heard of typically make these flights.

“They may fly a flight with all migrants or deportation flights today and they might fly fans to the Masters golf tournament tomorrow,” he said of the charters. “They don’t sell tickets in a retail manner like Avelo does.”

In New Haven, Connecticut, where Avelo flies out of Tweed New Haven Airport, Democratic Mayor Justin Elicker said he called Levy over the weekend to express his opposition to the arrangement and urged the CEO to reconsider.

“Avelo Airlines’ decision to charter deportation flights from Mesa Gateway Airport in Arizona is deeply disappointing and disturbing. For a company that champions themselves as ‘New Haven’s hometown airline,’ this business decision in antithetical to New Haven’s values,” Elicker said in a statement.

“Travel should be about bringing people together, not tearing families apart,” he added.

A local immigrant advocacy group called the New Haven Immigrants coalition is urging people to sign an online petition pledging to boycott the airline.

ICE did not immediately respond to a request for comment.

This story was originally featured on Fortune.com

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