Starbucks Feels the Heat as Trump’s Tariffs Bite, While Global Markets Climb
Dubai, August 7, 2025 – (Qahwa World) – As global markets open to positive momentum, Starbucks finds itself out of step. The coffee giant is under pressure following a newly implemented 50% U.S. tariff on Brazilian coffee, a move that analysts say will significantly impact its cost structure and investor sentiment.
While S&P 500 futures rose by 0.23% Wednesday morning—bouncing back from a 0.49% dip the previous day—Starbucks shares continue to slide, with a 1.15% year-to-date drop and a further 8% decline over the past five trading sessions.
Rising Costs and Shrinking Margins
Analyst Andrew Charles from TD Cowen estimates that the tariff could lead to a 3.5% annual increase in Starbucks’ operating costs, cutting into profits by about $0.02 per share.
The company’s recent Q2 results already reflect early signs of strain, with a 2% decline in same-store sales, even as average spend per customer ticked up by 1%—a sign that price increases are quietly making their way to consumers.
Given that the U.S. produces almost no coffee domestically, the full burden of the tariff will fall on importers and consumers, with no substantial economic blow to Brazil expected in return.
Brazil Holds Steady as Others Gain
Despite the trade tension, Goldman Sachs forecasts a 2.3% GDP growth for Brazil in 2025, suggesting limited impact from the U.S. tariffs.
Meanwhile, global markets may actually benefit. With the U.S. demand potentially weakening, surplus supply could shift to international buyers, applying downward pressure on global prices. In fact, Arabica coffee futures have dropped 30% this year, now sitting around $2.96 per tonne.
Global Market Snapshot Ahead of Wall Street Opening:
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S&P 500 Futures: ▲ 0.23%
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STOXX Europe 600: Flat
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FTSE 100 (UK): ▲ 0.18%
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Nikkei 225 (Japan): ▲ 0.6%
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CSI 300 (China): ▲ 0.24%
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KOSPI (South Korea): Flat
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Nifty 50 (India): ▼ 0.23%
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Bitcoin: ▼ to $113,900
