How come tariffs are affecting the price of coffee in Canada?

Coffee prices are on the rise, and suppliers are blaming ... US tariffs.

Hold on, you say, the USA doesn't produce any coffee (well, a little bit in Hawai'i and Puerto Rico). Aren't we just blaming tariffs for everything, just like we used to blame the pandemic for everything?

Well, yes and no.

Coffee prices have been rising for some months, even years, largely due to heat, drought, storms and other poor weather conditions in big producing countries like Brazil, Colombia, Vietnam, etc, due to climate change and La Niña conditions. As a result, the United Nations' Food and Agriculture Organization estimates that world coffee prices rose nearly 40% in 2024.

But, while most of Canada's unroasted coffee imports come from Brazil, Colombia and Honduras, most of its roasted coffee does in fact come from the USA, mainly because American companies are much more geared up and dominate the supply chain for the whole of North America.

The US, as mentioned, imports 99% of it's coffee (some of which it then re-exports to Canada, Mexico, etc), and it has imposed tariffs on most of its major coffee suppliers: Brazil (50% tariffs), Colombia (10% tariffs, liable to increase), Vietnam (20% tariffs), etc. So, American coffee prices are suddenly more expensive, which manifests as higher prices for countries, like Canada, that imports from the US. 

Big suppliers like Brazil that are strongly affected by US tariffs are also further affecting the supply pricing structure as they hold onto their coffee beans in the hope of future improvements in the tarrif landscape, thereby tightening available supply and worsening prices still further.

It gets even worse: Canada imposed a 25% counter-tariff in US imports (including coffee) back in March of this year, so the already inflated import prices are even higher as a result.

Although a 3c increase on a cup of Tim Hortons is not a big deal, despite the outcry, a bag of coffee in the supermarket has seen a much larger price increase (28% according to August figures from Statistics Canada). Either way, even these combined price increases are not going to mean that coffee consumption will actually go down in any significant way; after all, we are all pretty much addicted by this point. We'll just kvetch more about the cost.