Cafe Owner Says He May Have To Raise His Coffee Prices By As Much As 25% Thanks To Tariffs – CoffeeTalk

Hector Carvajal, the founder of Don Carvajal Cafe, is facing a dilemma as he may have to raise coffee prices by 25% due to Trump tariffs. The company’s coffee beans are sourced from countries like the Dominican Republic, Colombia, Brazil, and Costa Rica, which will be subject to the 10% tax. This levies affect farmers, customers, and business owners, making it difficult for them to adapt to changing trade policies.

Adjusting to changing trade policy takes time, energy, and resources for small businesses to adapt. Carvajal says explaining the reasons behind price changes is key to keeping customers informed and loyal to the brand. However, this can mean taking a hit to his personal income and what he can reinvest.

Collars & Co., a men’s apparel brand based in Bethesda, Maryland, produces its clothing in factories around the world, including in China, Pakistan, Colombia, and Brazil. Founder and CEO Justin Baer, 43, has been preparing for potential tariffs since the U.S. presidential election in November. He has been in contact with partner factories on how to share increased costs without passing them onto the customer. Collars & Co. brought in $40 million in sales in the last year, according to documents reviewed by CNBC Make It.

Baer says his priority is preserving his relationships with partnering factories overseas, as well as with customers. Collars & Co. brought in $40 million in sales in the last year, according to documents reviewed by CNBC Make It. That means ensuring his company is able to maintain the high quality of their products, which Baer says benefit by being made overseas.

The stock market has reacted sharply to the announcement of new tariffs, with the Dow losing over 4,500 points, the S&P 500 sustained a 12% loss, and the Nasdaq Composite down more than 13%. Stocks rose dramatically Wednesday after Trump announced a 90-day pause in some of the “reciprocal” tariffs, but then fell again Thursday, giving back much of the gains from the historic rally.

Baer is hopeful but unsure whether tariffs will ultimately improve the U.S. economy by generating revenue and creating more jobs. After the presidential election, he and his business partners began looking into U.S.-based manufacturing companies to find the same luxurious quality here while delivering an attainable luxury price in the United States. However, so far, the answer has been no.

Carvajal is more concerned with the near-term outlook on how his business will survive higher costs of production. He is trying to find a way to make this make sense for him and his customers, and adjust the way they do business and the pricing.

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