Coffee, dairy and dining out in the spotlight as F&B firms brace for Trump’s tariffs

From dairy to coffee, alcohol to meat, several food and beverage categories are feeling the pinch of the looming US trade tariffs.

Food Ingredients First examines reactions across various food and beverage sectors following US President Donald Trump's announcement of the latest round of tariff hikes last week.

After initially threatening much higher tariffs, Trump reached a tariff agreement with the EU after months of negotiations. The deal will impose 15% levies on most imports from the bloc. This avoids a trade war and is in exchange for massive European investments (US$750 billion) in US weapons and energy infrastructure.

A 10% “universal” levy on imported goods from countries with which the US has a trade surplus and a 15% tariff on goods from about 40 nations with which it has a trade deficit will begin on  Thursday. 

Some countries, including Brazil, face levies ranging up to 50%, while goods made in China will be subject to at least 30% tariffs. 

President Trump insists the extra tariffs will generate billions in revenue and encourage firms to manufacture in the US. On the other hand, many believe the tariffs will lead to higher costs for US consumers as companies raise their prices to cover extra taxes. 

It’s unclear if paying higher tariffs will drive down US F&B companies and ingredient firms producing in the US, as there may not always be a domestic substitute or a limited US production that doesn’t keep pace with demand. 

The cost of coffee imports

This is the case in the Brazilian coffee sector, as Brazilian coffee is not naturally produced domestically in the US. Almost all coffee drunk in the US comes from outside the country. 

If US imports of Brazilian coffee drop, Brazilian producers and exporters will have to find alternative markets. China is already Brazil’s top trade partner overall, and over the weekend, it approved 183 new Brazilian coffee companies to export products to the Chinese market. 

The new Chinese export permits will be valid for five years.

It’s not certain China could make up a US deficit, as according to CECAFE, a cooperative venture of coffee producers, Brazilian coffee exports into the US totaled 440,034 60-kilo bags in June 2025. During the same period, Brazil coffee sales to China totaled almost 56,000 bags.

Other coffee-producing nations like Vietnam also face a 20% tariff. 

China is already Brazil’s top trade partner overall, and over the weekend, it approved 183 new Brazilian coffee companies to export products to the Chinese market.

EU dairy industry’s disappointment

The European Dairy Trade Association, Eucolait, “strongly regrets” the imposition of additional tariffs and the continued move away from rule-based international trade that President Trump and the EU’s settlement represents. The organization brands it a “worrying trend” that risks causing permanent harm to the global trading system and to European trade policy.

“The deal reached between the EU and US last week is not a trade agreement in the traditional sense as it does not seek to substantially liberalise trade between the two. Trade agreements are supposed to be comprehensive, reduce tariffs, and deliver other benefits to both sides. This deal increases tariffs and is asymmetrical because it just limits the additional tariffs placed on European goods, in return for tariff and other concessions by the EU,” Jukka Likitalo, secretary-general, tells Food Ingredients First.

“The deal is most likely incompatible with the WTO rule book and therefore contributes to undermining the functioning of the rule-based trading system. The EU condoned Trump’s bullying to avoid a trade war and further damage to European industries. This obviously has some short-term economic benefits, but it does not support the credibility of the EU’s trade policy.” 

However, Likitalo says the impact on the EU dairy sector will be limited. Many products will face a lower tariff than currently because the additional 10% tariff will be replaced by the 15% ceiling. 

For example, a dairy product subject to a historical 20% MFN (Most- favored Nation) tariff of 20% would have been subject to a 30% tariff (20% + 10%) since April 2. From  August 7, the tariff will be “only” 20%, as according to Trump’s executive order published on July 31, and only the historical MFN tariff will apply if it is higher than 15%. 

“However, tariffs on dairy products, which are lower than 15% (for instance, casein and whey derivatives), will increase to 15%. These increases will only affect EU competitiveness versus US domestic products as imported products from other origins are also subject to (mostly higher) additional tariffs,” Likitalo tells us. 

Eucolait also urges greater transparency on the full scope of the tariffs and is anticipating the publication of additional details in the coming days.

Canada and the US are on shaky ground

Meanwhile, trade tensions between the US and Canada continue to worsen as President Trump increases the tariff rate on Canadian imports from 25% to 35%.

Canada has imposed counter-tariffs targeting various US-produced or manufactured foods, including peanut butter, canned goods, turkey, pasta, and oranges. 

Canada’s largest retailer, Loblaw, has even started labeling products with a “T” that have risen in price due to tariffs.

The supermarket giant says the “T” label is there to help consumers make informed choices when shopping. 

The National Restaurant Association says the new tariffs could raise prices for popular restaurant items like coffee and hamburgers, and many other needed menu ingredients. 

Foodservice industry reaction

Meanwhile, the National Restaurant Association (NRA) says the new tariffs on F&B could raise prices for popular restaurant items like coffee and hamburgers, and many other needed menu ingredients. 

The NRS is still evaluating the full impact of the latest tariff announcements. The organization is bracing itself for cost increases to access many important menu products and is calling for exemptions. 

“Operating a restaurant is becoming increasingly difficult due to economic and regulatory pressure and a nearly 5% increase in wholesale food costs since last year. These new tariffs on food and beverage items will exacerbate the situation,” says NRA President & CEO Michelle Korsmo.

“We ask the Trump administration to continue with sensible trade agreements. While addressing trade deficits is important, F&B products are not major contributors to these imbalances. We strongly advocate exempting F&B items from tariff negotiations, and ensuring USMCA-compliant goods remain exempt during ongoing talks with Mexico and Canada.”