Trump’s Tariff Shockwaves Rattle Coffee, Cocoa, and Sugar Markets Worldwide
World markets for coffee, cocoa, and sugar saw notable declines on Wednesday, following a dramatic escalation in trade tensions sparked by U.S. President Donald Trump’s announcement of sweeping new import tariffs. Investors reacted with concern, fearing that higher costs would dampen demand for key soft commodities in the United States—one of the largest global consumers of chocolate and coffee products.
The latest trade measures include a 10% baseline tariff on all U.S. imports, with certain countries facing levies exceeding 50%. This move marks a sharp departure from decades of trade liberalization and sent ripples across global commodity markets, triggering sell-offs and heightened volatility.
Coffee markets were particularly impacted. Arabica coffee futures on the ICE exchange—a benchmark for global prices—fell 0.7% to $3.8605 per pound by 15:54 GMT, after dropping nearly 3% earlier in the day. Robusta coffee prices also weakened, slipping 0.1% to $5,393 per metric ton, following a steeper decline of 2.5% earlier.
Tariffs targeting major coffee-producing nations added to the pressure. Vietnam and Indonesia—leading exporters of robusta coffee—now face tariffs of 46% and 32%, respectively. Brazil, the world’s top exporter of arabica coffee and a key sugar supplier, was hit with a 10% tariff.
Cocoa markets were similarly disrupted. London cocoa futures declined 1.9% to £6,654 per ton, after earlier tumbling nearly 5%. In contrast, New York cocoa prices surged 3.3% to $9,262 per ton, buoyed by a weakening U.S. dollar. The disparity reflects currency-driven market dynamics, with a softer dollar making dollar-priced cocoa more attractive to international buyers, while sterling gains rendered London cocoa less competitive abroad.
Top cocoa producers Ivory Coast and Ghana were not spared, facing tariffs of 21% and 10%, respectively. The U.S. is also a significant importer of processed cocoa products—such as butter and powder—from the European Union, Malaysia, and Indonesia. These regions were likewise hit with tariffs of 20%, 24%, and 32%, respectively, affecting both cocoa and coffee shipments.
“The full impact remains uncertain, but the message is clear: there are no winners,” said a Europe-based coffee trader. “This is bad for everyone. For the U.S., it’s inflationary. For producers and exporters, it cuts off access to one of the world’s most important markets.”
Sugar markets followed a similar trajectory. Raw sugar prices dropped 2.2% to 19.17 cents per pound, while white sugar fell 1.5% to $544.70 per ton.
As investors scrambled to adjust their positions, safe-haven assets like bonds and gold gained momentum—further reflecting the unease surrounding the shift in global trade policy. For the coffee and cocoa sectors, which rely on stable trade flows and price transparency, the road ahead may be marked by uncertainty and volatility.
