Evans Bros responds to coffee tariffs, uncertainty over exemptions

By Zach Hagadone
Reader Staff

Despite recent moves by President Donald Trump to roll back or otherwise loosen some trade tariffs, consumers continue to see rising prices for all manner of goods and services as suppliers pass on the higher costs to their customers. One such commodity that Trump has targeted for easing the tariff-related pinch is coffee, which is big news for one of Sandpoint’s most popular local businesses, Evans Brothers Coffee Roasters.

Co-owner Rick Evans told the Reader that while it’s “partially true” that tariffs on coffee imports will lessen, that won’t include beans from Brazil, which is the single largest coffee exporter and accounts for one-third of all U.S. consumption, yet is still subject to a 40% tariff. 

“We’ve been fortunate because we happened to lock in some of the Brazilian coffee pre-tariff, but we’ve also had to reduce that significantly from our inventory,” Evans said.

Some tariffs started going into effect in April, and, by August, some had been raised — including against Brazil — to up to 50%. At that time, Evans said his business started seeing a tariff line item on its invoices, and the expense stacked up fast.

“We’ve been paying about $1,500 a week just in tariffs; that’s probably just since August,” he said.

For a brief time in recent weeks, it looked like the U.S. coffee industry would actually receive some relief as Congress worked to fast-track the No Coffee Tax Act — a bipartisan effort that would have exempted all coffee imports from tariffs. 

According to the National Coffee Association, two-thirds of U.S. adults drink coffee each day and, as of the most recent data — from 2022 — the total economic impact of the industry in the U.S. amounts to $343.2 billion, supporting more than 2.2 million jobs and generating more than $100 billion in wages each year. Meanwhile, consumers spend more than $300 million on coffee products each day, accounting for about $110 billion in annual spending.

In a Nov. 6 article from Roast Magazine, the average cost for a pound of roasted, ground coffee in the grocery store hit $9.14 in September — a 41% increase from the year before. 

Co-authored by Sen. Catherine Cortez Masto, D-Nev., and Sen. Rand Paul, R-Ky., the No Coffee Tax Act was proposed for passage in the Senate on a vote of unanimous consent — meaning it would move forward without a roll-call vote if every member agreed. However, a lone senator voted against the bill, kicking it back to committee: Mike Crapo, R-Idaho.

He objected to the bill making “one-off exceptions … in isolation of a larger negotiating strategy and broader stakeholder concerns,” according to reports.

Crapo and others have further argued that tariff exemptions for many other coffee exporters will provide enough relief to calm rising prices, but Evans — as well as the coffee industry at large — emphasized that Brazilian coffee production is the backbone for the world market, and relatively small percentages of coffee products come from other places. In the U.S., only two areas are capable of producing anywhere near a commercially viable quantity of coffee: Hawaii and Puerto Rico.

“It has nothing to do with the purported reason for the tariffs, which is correcting trade imbalances and bringing back manufacturing to the U.S.,” Evans said. “Coffee can’t really be commercially produced in the U.S.” 

Even if Congress did approve legislation like the No Coffee Tax Act, and the current tariffs on Brazil were lifted, Evans said prices still wouldn’t go down immediately because U.S. coffee wholesalers and retailers have already paid tariffs on their current inventory and will continue to pass on that sunk cost to consumers until they’ve recouped those expenses. 

But the global coffee market faces other challenges, including years of depressed harvests due to changing weather patterns and global warming, which have contributed to lower profits for farmers who also suffer from labor shortages.

“There’s a global supply issue when it comes to coffee,” Evans said, adding, “there’s been inherently not enough money through the coffee chain for a long time.”

Meanwhile, populations in China and India have started consuming more specialty coffees, potentially opening the way for billions of new customers into the market. On top of all that, coffee is an exchange-traded commodity, prone to speculation that can roil prices.

The tariffs have been “gasoline on the fire,” Evans said.

“We’ve definitely raised prices,” he said. “Our margins are significantly lower than they were a year ago.”

According to Evans, selling beans to a restaurant typically comes with a 50-60% margin, while wholesale is 35-40%. 

“Now we’re lucky if we’re making 15-20% for wholesale and retail is probably more like 35%,” he added. “We’ve sold more this year but our profits are down.” 

Looking ahead, Evans said, “The uncertainty itself just creates that chaos in the market.” However, he added, “We really appreciate the customers we have and people continuing to buy our coffee. And we appreciate the place where we are. … We’ve got a great team; we’re going to make it, but others won’t be so lucky.”