Trump’s tariffs squeeze coffee businesses in Washington

Global Business

Washington state is among U.S. states particularly worried about global trade conflicts right now.

It shares a border with Canada — and stands to lose out in a big way if the situation escalates further.

Coffee is big business in this place. Seattle was home to the first Starbucks and has become synonymous with America’s coffee culture.

CGTN’s Phil Lavelle reports.

The coffee isn’t actually grown here; it’s imported from points across the globe, everywhere from Central America, to Africa, to Southeast Asia.

But when it arrives in Washington, it’s roasted and exported.

Emanuele Bizzarri is worried. Italian by birth but a Seattleite now, he roasts coffee for a living. His Caffe Umbria chain has a number of coffee shops in the Seattle and Washington state area and his main roasting plant is near Seattle’s airport.

“In about a year, we’re gonna lose about $250,000,” Bizzarri said.

“The Canadian market is actually growing. It’s been growing since we started. We’ve been in Canada for over 12 years now. And every year, it’s always a better year. We’re already having issues with the dollar exchange so that’s created some issues already with expense of coffee in Canada compared to a local roaster, and this extra fee cannot be turned into the consumer so we’re gonna have to absorb all of that and that’s going to be an issue for us going into the future.”

In fact, Emanuele’s looking at more drastic action — moving part of his business into Canada and incorporating across the border:

“We’re very close to Canada, a two-hour drive and we want to actually look into becoming partnered with a Canadian company. So we do want to move some of our production into Canada and become local since we already have offices over there and we do want to probably incorporate into Canada and become a Canadian company also. So more of an international company. It is something we’ve been thinking about for a long time. It’s not a pressing issue – or it WASN’T a pressing issue – until this came along. And now actually this makes us really look into it. With two years’ worth of fees that I would pay, I could open a small operation in Canada. So really, for half a million dollars, I could open an operation in Canada and if this stays on, it makes sense as a businessperson.”

Coffee is only part of the story here, though. That market is worth $58 million a year, but when you take into account Washington’s other exports to Canada – everything from concrete rods to aluminum – the number reaches $629 million, according to the U.S. Chamber of Commerce.

And that’s just for Canada. Once you factor in potential trade conflicts with China, Europe and Mexico, some $6.2 billion worth of goods are under threat, making Washington one of the most vulnerable states in the country right now.

Other states the U.S. Chamber of Commerce flags as open to significant damage in the trade conflicts include Idaho, South Dakota, Alaska, Louisiana, Alabama and South Carolina. They export a range of goods to Canada, including refrigerator-freezers, lawnmowers, perfumed goods and playing cards.

Asked about the prospects of this ongoing conflict, Seattle University Professor of Business and Economics Brian Kelly tells CGTN:

“The problem is that I don’t think the Trump administration has an end game. I think that they’re playing it by ear and they simply don’t know where they want to end up. So right now, it’s a lot of bravado. But it’s harmful bravado with no escape hatch. The United States has picked fights with everyone.”

And so, the politicking continues as does the very public admonishing by all sides seeking to gain the upper hand. It’s a high-stakes game being played here, with no clear winner in sight.