Coffee, Crude Oil, and Cut Flowers: Bracing for Higher Prices Under Trump's Tariffs

President Donald Trump's newly announced tariffs on goods from Colombia could drive up the price of some everyday items for Americans, including coffee, crude oil, and cut flowers. The tariffs, which Trump said would immediately be set at 25% and rise to 50% in one week, are a response to Colombia's refusal to accept two U.S. military flights of deported migrants.

Colombia is the second-largest source of coffee imports to the U.S., accounting for about 20% of coffee shipped to the U.S. (U.S. Department of Agriculture). A 25% tariff on Colombian coffee would increase the cost of coffee for U.S. consumers in the short term. For example, if a pound of Colombian coffee costs $5, a 25% tariff would add $1.25 to the price, making it $6.25 per pound. In the long term, U.S. coffee producers may increase production to meet the demand, but this would take time and may not fully offset the price increase. Additionally, consumers may switch to cheaper alternatives, such as instant coffee or other types of coffee, reducing the overall demand for Colombian coffee.

Colombia ranks fourth in crude oil exports to the U.S., with about 27% of U.S. unroasted coffee imports coming from Colombia (U.S. Energy Information Administration). A 25% tariff on Colombian crude oil would increase the cost of oil for U.S. consumers in the short term. For instance, if the price of a barrel of Colombian crude oil is $70, a 25% tariff would add $17.50 to the price, making it $87.50 per barrel. In the long term, U.S. oil producers may increase production to meet the demand, but this would take time and may not fully offset the price increase. Additionally, consumers may switch to alternative energy sources, reducing the overall demand for oil.

Colombia is the third-largest exporter of cut flowers to the U.S., with $1.6 billion in exports in 2022 (Observatory of Economic Complexity). A 25% tariff on Colombian cut flowers would increase the cost of flowers for U.S. consumers in the short term. For example, if a bouquet of Colombian roses costs $10, a 25% tariff would add $2.50 to the price, making it $12.50. In the long term, U.S. flower producers may increase production to meet the demand, but this would take time and may not fully offset the price increase. Additionally, consumers may switch to cheaper alternatives, such as artificial flowers, reducing the overall demand for Colombian cut flowers.

The tariffs could also disrupt the global markets for these goods, potentially leading to supply shortages and further price increases. For example, if U.S. consumers reduce their demand for Colombian coffee, other coffee-producing countries may not be able to fill the gap, leading to a global shortage and higher prices.

In conclusion, President Trump's tariffs on Colombian goods could lead to short-term price increases for coffee, crude oil, and cut flowers in the U.S. In the long term, the impact on prices will depend on various factors, such as the ability of U.S. producers to increase production, consumer behavior, and global market dynamics. Consumers should brace themselves for higher prices and consider alternative sources or cheaper alternatives to mitigate the impact of the tariffs.