Impacts of New U.S. Tariff Policies on Vietnam’s Coffee Industry (P2)

As new U.S. tariff measures reshape the global trade landscape, Vietnam’s coffee industry finds itself at a critical inflection point. The ripple effects of a 20% blanket tariff and an additional 40% penalty for suspected transshipment are not just affecting export margins—they are redefining competitiveness in the world’s largest coffee-consuming market. But these tariffs don’t operate in isolation. To fully grasp their long-term impact, one must place them within the broader context of the global coffee market for 2025–2026—a landscape shaped by shifting supply dynamics, price volatility, and evolving consumer trends. In this post, we decode the global forces at play and what they mean for Vietnamese coffee exporters navigating turbulent times.

Global Coffee Market Context for the 2025-2026 Period

The new U.S. tariff policy does not operate in a vacuum. Its effectiveness and impact on Vietnam’s coffee industry will largely depend on the dynamics of the global coffee market, including the supply-demand balance, consumption trends in key markets, and other cost factors.

Global Supply and Demand: Production Forecasts for Vietnam, Brazil, and Key Nations

The world coffee market in the 2025-2026 period is forecast to be volatile, with mixed signals from the largest suppliers.

• • Global Supply-Demand Picture: The U.S. Department of Agriculture (USDA) forecasts global coffee production for the 2025/26 crop year to reach a record 178.7 million bags (60 kg type), an increase of 4.3 million bags from the previous crop year. With global consumption projected at around 169.4 million bags, the market could face a surplus of about 9.3 million bags, creating widespread downward price pressure. However, other forecasts present a less optimistic picture, creating uncertainty.   

• Vietnam’s Production: Most organizations forecast a strong recovery for Vietnam’s coffee production in the 2025/26 crop year. The USDA projects production will increase to 31 million bags, including 30 million bags of Robusta, thanks to favorable weather conditions and high prices in the previous year encouraging farmers to invest more in cultivation. The Mercantile Exchange of Vietnam (MXV) also offers a similar forecast of significant recovery, with production potentially increasing by 10% compared to 2024. The La Niña phenomenon is expected to replace El Niño, helping to alleviate drought concerns.   
• Brazil’s Production – The Biggest Uncertainty: Forecasts for the production of Brazil, the world’s largest coffee producer, are markedly contradictory, creating significant market risk. On one hand, Brazil’s National Supply Company (Conab) and some initial USDA reports suggest that Brazil’s 2025 production will increase, especially Robusta (Conilon) output, which could reach a record level, helping to offset the cyclical decline in Arabica. On the other hand, Rabobank offers a more pessimistic forecast, suggesting that Brazil’s total production for the 2025/26 crop year will decrease by about 6.4% due to prolonged dry weather conditions negatively affecting the flowering of Arabica plants. 

The contradiction in forecasts for Brazil creates a high-stakes gamble for Vietnamese exporters. If Rabobank’s scenario (reduced Brazilian output) materializes, world coffee prices could remain high, helping to mitigate the negative impact of U.S. tariffs. Conversely, if the USDA/Conab scenario (record Brazilian Robusta output) occurs, the U.S. market will be flooded with cheap Conilon coffee at the exact moment Vietnamese Robusta is hit with a 20% tariff, creating a “perfect storm” that puts Vietnamese coffee at a severe disadvantage.

• Other Factors: Input costs such as fertilizer remain high, affecting farmers’ profits. Extreme weather events like El Niño and La Niña continue to be unpredictable factors that can cause sudden fluctuations in productivity in major growing regions.   

The U.S. Market: Analysis of Consumption Trends, Import Structure, and the Role of Vietnamese Coffee

The United States is not only a major economy but also the world’s most important coffee-consuming market, so any changes in policy and consumption trends here have a profound impact on producing countries.

• Scale and Importance: The U.S. is the world’s largest coffee importer, accounting for 17.7% of total global import turnover in 2024 with a value of about $9 billion. The domestic U.S. coffee market is forecast to reach a value of $90.97 billion in 2025 and continue to grow.   
• Import Structure and Vietnam’s Position: The leading coffee suppliers to the U.S. have traditionally been Brazil and Colombia, followed by Vietnam. However, Vietnam’s position in this market is not stable. Data shows that Vietnam’s coffee market share in total U.S. imports decreased from 10.71% in the first 11 months of 2023 to 6.96% in the same period of 2024. Conversely, other statistics recorded export growth to the U.S. in the first quarter of 2023 and the first 9 months of 2023. This volatility indicates the sensitivity of orders to price and logistics factors.   
• Domestic U.S. Consumption Trends:
  • At-home consumption: This trend, which boomed after the COVID-19 pandemic, continues to remain high. A 2024 survey showed that 81% of Americans drank coffee at home the previous day. Inflation and work-from-home culture have reinforced this trend, as consumers seek to save costs compared to buying coffee at cafes.   
  • The rise of convenience products: The at-home consumption trend has strongly boosted sales of convenience products such as instant coffee, pods & capsules, and Ready-to-Drink (RTD) coffee. Vietnam’s Robusta coffee is an essential ingredient in many instant coffee products and espresso blends used in pods in the U.S. market.   
  • Premiumization and Specialty Coffee: Parallel to the convenience trend, U.S. consumers are increasingly interested in high-quality, traceable, and sustainable coffee products. The specialty coffee market is growing strongly, especially among young people.  

The popularity of at-home convenience products is a double-edged sword for Vietnam. On one hand, it creates stable demand for Robusta coffee. On the other hand, these segments are extremely price-sensitive. Large consumer packaged goods (CPG) corporations like Nestlé or J.M. Smucker, who are major buyers of Robusta, will be the quickest to seek replacements for Vietnamese supply with Brazilian Conilon to protect their profit margins from the impact of the 20% tariff.   

Table 2: Vietnam’s Coffee Export Performance to Key Markets (2023 – First Half of 2025)

Note: Data is compiled from multiple sources with different timeframes; this table is intended to illustrate general trends.

Cost Drivers and Price Volatility

Besides supply and demand, coffee prices are also affected by financial and logistical factors. Ocean freight rates, although having cooled from their pandemic peak, can still fluctuate due to geopolitical tensions. Exchange rate fluctuations, especially the strengthening of the USD against the Brazilian Real (BRL) and the Vietnamese Dong (VND), can encourage producing countries to boost exports, adding further downward pressure on world market prices. Coffee futures prices on the London (Robusta) and New York (Arabica) exchanges have experienced periods of strong volatility in 2024 and 2025, reflecting uncertainty about supply and macroeconomic risks.   

At Helena Coffee

We understand that behind every export number and every tariff policy lies the livelihood of farmers, the resilience of exporters, and the future of Vietnamese coffee on the world stage. That’s why we don’t just follow the market—we help shape it. With our commitment to quality, transparency, and sustainable partnerships, Helena Coffee is here to support roasters, importers, and producers in navigating this new era of global trade.

Stay tuned for our next blog: “Analysis of Multidimensional Impacts on Vietnam’s Coffee Industry” – where we’ll break down how the latest economic shifts are affecting every layer of the value chain, and what Vietnamese coffee stakeholders can do to turn challenges into long-term opportunities. Don’t miss it!

👉 Visit www.helenacoffee.vn or Info@helenacoffee.vn to explore our products and request a direct quote today!