Behind the Tariff Rollback: Public Expectations and Strategic Calculus in America’s New Coffee Trade Policy

 As U.S. consumers face rising coffee prices, the Trump administration has made a major adjustment to its trade policy. On November 13, the White House published four separate statements announcing new framework agreements with Argentina, Guatemala, Ecuador, and El Salvador. These agreements introduce tariff reductions on key agricultural products—including coffee—in an effort to ease the pressure of escalating coffee prices by further opening the market.

This policy shift, described by many observers as a “targeted trade adjustment,” reflects not only consumer-driven demand—U.S. Bureau of Labor Statistics data has shown a notable rise in coffee prices—but also complex geopolitical calculations and domestic political considerations.

**01

A Mosaic of Differentiated Tariffs: Balancing Interests in Latin American Coffee Trade**

The new tariff arrangement features a clearly layered approach. Across Latin America, the U.S. and the four partner nations created a hybrid structure built on “baseline tariffs + product exemptions.” According to senior U.S. officials, the existing 10% tariffs on products from Guatemala, El Salvador, and Argentina—and the 15% tariff on Ecuador—will remain in place, but essential items such as coffee—products the U.S. is “unable to sufficiently produce domestically”—are added to the exemption list.

This design precisely targets vulnerabilities in the supply chain: the U.S. produces less than 1% of the coffee it consumes, relying on imports for 99% of its supply. Guatemala and Ecuador are both key import sources for the U.S., meaning tariff exemptions will directly ease supply pressure.

**02

Dual Forces: The Coffee Price Squeeze and the Policy Pivot**

The immediate trigger for the tariff rollback lies in worsening consumer price data. According to the U.S. Bureau of Labor Statistics, coffee prices have climbed significantly due to global supply chain disruptions and imbalances between supply and demand. As the world’s largest coffee-consuming country—importing 99% of its coffee beans—U.S. supply chain stability is directly affected by tariff changes. Some coffee chains have already adjusted procurement strategies to manage rising costs.

Political pressure further accelerated this policy shift. Public frustration over rising living costs continues to grow, creating challenges for the ruling Republican Party. Industry groups have also pushed for adjustments to coffee-related tariffs. Against this backdrop, the Trump administration moved swiftly to negotiate coffee trade provisions—revealing an underlying logic tied to election-driven economic considerations.

**03

Uncertain Benefits: The “Last Mile” Challenge from Port to Coffee Cup**

While the policy’s intentions are positive, whether tariff savings will translate into lower retail coffee prices remains uncertain. From South American farms to U.S. coffee shops, coffee beans undergo roasting, distribution, and multiple logistical processes. Any savings from lower tariffs may be offset by rising costs in transportation, labor, or energy.

Industry analysis indicates that the impact of tariff changes on consumer prices is often delayed and constrained by factors such as market competition.

Global market dynamics may also dilute the intended effect. According to the UN Food and Agriculture Organization, global coffee prices rose sharply in 2024 due to extreme weather in major producing countries. Continued climate volatility has disrupted production this year as well, with futures markets reflecting this expectation early.

New estimates from the U.S. Department of Agriculture suggest that despite tariff reductions, global supply-demand pressures may still push U.S. coffee import costs upward. This paradox of “lower tariffs but higher costs” presents a challenge for policymakers.

**04

Geoeconomic Layers: Strategic Minerals and Digital Taxation Inside the Negotiations**

Behind the agricultural tariff adjustments lies a deeper strategic agenda. The agreements between the U.S. and the four Latin American nations include two core objectives: securing access to strategic mineral resources and obtaining commitments from these nations not to impose digital service taxes. This multi-issue, cross-sector negotiation approach intertwines economic goals with geopolitical strategy.

Analysts note that the real-world impact of these agreements—both in terms of price stabilization and strategic gains—will take time to evaluate. From a market standpoint, if global supply pressures persist, U.S. coffee prices may continue to rise, increasing burdens on household budgets.

With the policy framework now largely established, the key question becomes whether tariff reductions can effectively pass through the complex supply chain and ultimately show up on supermarket shelves and café menus. This will determine the true public value and effectiveness of America’s new coffee trade policy.