{"id":41520,"date":"2025-07-12T11:36:17","date_gmt":"2025-07-12T11:36:17","guid":{"rendered":"https:\/\/quickassetsmarket.com\/index.php\/2025\/07\/12\/trumps-50-tariff-on-brazil-imports-to-brew-trouble-for-starbucks-and-dutch-bros\/"},"modified":"2025-07-12T11:36:17","modified_gmt":"2025-07-12T11:36:17","slug":"trumps-50-tariff-on-brazil-imports-to-brew-trouble-for-starbucks-and-dutch-bros","status":"publish","type":"post","link":"https:\/\/quickassetsmarket.com\/index.php\/2025\/07\/12\/trumps-50-tariff-on-brazil-imports-to-brew-trouble-for-starbucks-and-dutch-bros\/","title":{"rendered":"Trump\u2019s 50% tariff on Brazil imports to brew trouble for Starbucks and Dutch Bros"},"content":{"rendered":"
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Shares of Starbucks and other major US coffee retailers could face higher costs after the Trump administration proposed a sweeping 50% tariff on all imports from Brazil<\/a> \u2014 the world\u2019s largest coffee exporter. <\/p>\n

The policy, set to take effect on August 1 unless Brazil negotiates an exemption, threatens to raise input costs for beverage giants that rely heavily on Brazilian beans.<\/p>\n

According to TD Cowen analyst Andrew Charles, Starbucks could see a 0.5% increase in North America\u2019s cost of goods sold due to its exposure to Brazilian coffee. <\/p>\n

Roughly 22% of Starbucks\u2019 North American coffee beans come from Brazil, accounting for about 2.2% of its total cost base in the region. <\/p>\n

A 50% tariff, therefore, would push up input costs and shave off an estimated 1.4% from its earnings.<\/p>\n

The impact on Starbucks\u2019 Channel Development segment \u2014 which includes ready-to-drink beverages and packaged beans sold through grocery stores \u2014 could be more pronounced. <\/p>\n

Charles estimated a 3.5% lift in costs for that division, resulting in an additional 0.6% drag on the company\u2019s earnings. In total, the tariff could mean a 5-cent reduction in annual earnings per share.<\/p>\n

Consumers may avoid price hikes, at least for now<\/h2>\n

While the looming tariff could squeeze Starbucks\u2019 profit margins, the company is unlikely to pass on the higher costs to customers, at least not immediately.<\/p>\n

Following a year of sluggish US sales and customer frustration over rising prices, CEO Brian Niccol committed to holding prices steady through 2025 in hopes of winning back foot traffic.<\/p>\n

Still, persistent cost pressure could eventually limit pricing flexibility. <\/p>\n

Coffee futures rose 1% on Thursday in response to the tariff announcement, although they remain below February\u2019s record highs driven by extreme weather in Brazil. <\/p>\n

Supply disruptions from drought and frost have already pushed global coffee prices upward over the past two years.<\/p>\n

Charles emphasized that Starbucks\u2019 global sourcing \u2014 spanning over 30 countries \u2014 and its increasingly diverse menu could soften the blow. <\/p>\n

Its popular non-coffee beverages like Refreshers now play a growing role in the company\u2019s North America revenue stream.<\/p>\n

Dutch Bros and others also in the line of fire<\/h2>\n

Rival Dutch Bros, which relies on Brazilian beans for over half its coffee supply, could also face margin compression. <\/p>\n

While coffee comprises less than 10% of Dutch Bros\u2019 cost of goods sold, Charles estimates the new tariff would drive a 1.3% rise in its annual cost base and lead to a 0.5% reduction in profits.<\/p>\n

Other companies, such as JM Smucker \u2014 the owner of Folgers \u2014 and Keurig Dr Pepper could also see their sourcing costs surge.<\/p>\n

Brazil supplies about a third of the US green coffee beans, according to the US Department of Agriculture.<\/p>\n

Giuseppe Lavazza, chairman of Italian coffee roaster Lavazza, said in an interview Thursday that the Trump tariff could trigger \u201ca lot of inflation\u201d across the global coffee sector. <\/p>\n

Most US coffee cannot be domestically sourced, given that only Hawaii and Puerto Rico offer the right climate for bean cultivation.<\/p>\n

Possible exemptions and timeline<\/h2>\n

The White House still has time to reconsider. <\/p>\n

USDA Secretary Brooke Rollins said in June that exemptions are under discussion for essential imports that can\u2019t be grown in the US, such as coffee. <\/p>\n

However, until any such measures are formalized, coffee retailers face an uncertain summer.<\/p>\n

Starbucks stock is up just 2.69% year-to-date. <\/p>\n

Shares rose 21% on the day Niccol was appointed CEO in August 2024, but his turnaround strategy is yet to fully materialize. <\/p>\n

No financial targets have been shared so far, and sales have yet to rebound meaningfully.<\/p>\n

Meanwhile, analysts say that if the tariff goes through without exemptions, a broad swath of the US coffee industry will have to absorb higher commodity costs \u2014 or eventually pass them on to inflation-weary consumers.<\/p>\n

The post Trump’s 50% tariff on Brazil imports to brew trouble for Starbucks and Dutch Bros<\/a> appeared first on Invezz<\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of Starbucks and other major US coffee retailers could face higher costs after the Trump administration proposed a sweeping 50% tariff on all imports from Brazil \u2014 the world\u2019s largest coffee exporter. The policy, set to take effect on August 1 unless Brazil negotiates an exemption, threatens to raise input costs for beverage giants <\/p>\n","protected":false},"author":1,"featured_media":41521,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-41520","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"_links":{"self":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/41520","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/comments?post=41520"}],"version-history":[{"count":0,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/41520\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media\/41521"}],"wp:attachment":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media?parent=41520"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/categories?post=41520"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/tags?post=41520"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}