Monday was National Coffee Day. And here at Demography Unplugged, we drink a lot of tony Italian-brand arabica. So we felt the pinch in our mugs long before the BLS confirmed it. According to the August CPI report, coffee prices are up a whopping +20.9% YoY, far outpacing the overall inflation rate of just +2.9%.
There are two main drivers behind the surge. First, severe droughts in Brazil and Vietnam, the world’s top coffee producers, have slashed harvests. Second, Trump’s tariffs are adding fuel to the fire: Imports from Vietnam face a 20% duty, while Brazilian goods are hit with a steep 50% levy.
But there may be a sliver of hope for our fellow coffee fiends. A bipartisan bill in the House would exempt coffee from Trump’s tariffs (caffeine addiction knows no political party!), and weather forecasts in Brazil and Vietnam are finally calling for more rain.
Let the hoarding begin!