Starbucks and the Swiss Supplier Dilemma: Tariff-Driven Supply Chain Risks in a Globalized World

The global supply chain crisis of 2025 has laid bare the vulnerabilities of multinational corporations, with Starbucks’ reliance on Swiss supplier Thermoplan serving as a stark case study. The 39% U.S. tariffs on Swiss goods have forced Thermoplan to absorb an additional 200,000 Swiss francs in weekly costs, prompting the company to explore production relocations to Germany and the U.S. [1]. For Starbucks, this disruption underscores the fragility of cross-border manufacturing partnerships in an era of escalating trade barriers.

The financial toll of these tariffs is evident in Starbucks’ fiscal 2025 performance. The company’s consolidated operating margin contracted by 450 basis points year-over-year in Q2 2025, driven by rising tariffs on merchandise from China and imported beverage components [2]. To counteract these pressures, Starbucks has shifted production for key products to alternate sites and localized supply-chain functions. However, the looming 50% U.S. tariff on Brazilian coffee—a critical supplier—threatens to add 3.5% in annual costs, potentially reducing earnings by two cents per share [3].

The ripple effects of these tariffs extend beyond Starbucks. The Bureau of Labor Statistics reports a 14.5% year-over-year surge in coffee prices in July 2025, with the average retail price for a pound of ground coffee hitting $8.41 [4]. Small businesses, such as Nebraska’s Bethany’s Coffee Shop, have raised prices by 18% to 25% to offset tariffs, while specialty roasters face margin erosion as pricing shifts from quality to cost [5]. For investors, these trends highlight the dual risks of inflationary pressures and supply-chain instability in a fragmented global market.

Starbucks’ response—prioritizing ethical sourcing through programs like C.A.F.E. Practices—demonstrates a commitment to sustainability but cannot fully insulate the company from geopolitical trade wars. As the White House negotiates new trade frameworks with Indonesia and other nations, the coffee industry remains in a state of flux, with sourcing strategies and consumer demand poised for further disruption [6].

For investors, the lesson is clear: supply chain resilience in multinational corporations hinges on diversification, localized production, and agile procurement strategies. Starbucks’ experience with Thermoplan and Brazilian coffee illustrates the high stakes of overreliance on any single supplier or market. In a world where tariffs are both a tool and a weapon, adaptability will separate survivors from casualties.

Source:
[1] Key Starbucks supplier in Switzerland tastes bitter harvest of Trump tariffs, [https://www.reuters.com/business/key-starbucks-supplier-switzerland-tastes-bitter-harvest-trump-tariffs-2025-09-02/]
[2] How is Starbucks Navigating Tariffs and Price Volatility in FY25?, [https://finance.yahoo.com/news/starbucks-navigating-tariffs-price-volatility-142800347.html]
[3] Starbucks under pressure again as Brazilian tariffs hike ..., [https://www.aol.com/finance/starbucks-under-pressure-again-brazilian-161655961.html]
[4] Coffee and tea prices ramp up due to tariffs, [https://www.cnbc.com/2025/08/13/coffee-and-tea-prices-ramp-up-due-to-tariffs.html]