US Tariffs Present Risks & Opportunities For Ethiopian Coffee Exporters – CoffeeTalk

The US tariff regime, which imposes a 10% baseline on Ethiopia’s coffee exports, could have significant impacts on the country’s coffee export trade. The US is the third-largest buyer of Ethiopian coffee, accounting for around a fifth of revenues each year. Experts, such as Demeke Tsegaye, a banker specializing in coffee export financing, believe that the tariffs will directly impact Ethiopian exporters by increasing the cost of coffee. This is within the natural demand-supply principle, meaning that demand in the US for Ethiopia’s coffee may decrease as consumers opt for cheaper and more readily available robusta coffee supplied in bulk by South American producers such as Brazil, Peru, and Colombia. However, higher tariffs on other coffee producing countries could also grant Ethiopia a competitive edge in the US market.

The Latin American countries, which produce coffee in bulk and are located close to the US market, have a better competitive advantage. Ethiopia will need to dramatically improve its production and supply efficiencies by cutting on the long, unnecessary processes in the value chain. While US green coffee traders and roasters are already feeling the effects of a period of nominally high coffee prices on the New York Arabica futures market (the ‘C Price’), they must now prepare to cover even pricier costs of goods, with many of the world’s top producing countries facing stiffer import costs.

According to the Global Coffee Report (GCR), for the first time ever, the demand for coffee worldwide has surpassed supply, driving prices significantly upward. Coffee updates for 2025 already show a 12 percent increase in the price of coffee in the last six months, with the price of a pound of green beans jumping to as high as USD 7.50 in January. This is more than three times the USD 2.40 a pound registered in August 2024, which was a 13-year high.

Observers hope that the rising prices could spark a fundamental transformation in the Ethiopian coffee trade, where exporters often sell at a loss in a bid to earn foreign currency to supplement other, more profitable lines of business. The lack of competitiveness played a large role in dwarfing the coffee export industry, which accounts for a third of Ethiopia’s total export revenues. However, the forex reforms of mid-2024 have transformed the trade, and Ethiopian coffee exporters are now beginning to see real profits as a result.

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