Coffee cafes, sellers throughout SE Wisconsin bracing for skyrocketing costs due to White House tariffs on foreign imports

MILWAUKEE (CBS 58) -- As the stock market navigated another day of uncertainty, one major industry is facing a challenging short-term future that could affect most Americans.

Milwaukee coffee sellers and cafes are preparing for the possibility of much higher costs as they carefully monitor international trade negotiations.

For Stone Creek Coffee and most sellers that import their product, the White House's tariffs on foreign goods means virtually all coffee brought into the US will cost them an extra 10%.

That could cost some local sellers in Milwaukee hundreds of thousands of dollars more.

Drew Pond is the director of development at Stone Creek Coffee. He said, "Everybody's certainly going to have to come to grips with it at one point or another."

Ten percent tariffs are just the latest hurdle coffee producers will have to navigate. Pond said the industry was already coping with a volatile market that has increased the cost of coffee in recent years. "Where it is today has basically doubled compared to two years ago," Pond said.

Then came the tariffs.

Stone Creek operates nine cafes throughout southeast Wisconsin. And the cost of coffee is the biggest expense after labor.

With much of its product imported from Colombia, Nicaragua, Costa Rica, Guatemala, and other countries, Stone Creek is staring down an extra cost of $200,000 just for tariffs.

Pond said he and the company have personal relationships with their international farmers, but the money isn't going to them. "That'd be kind of a dub, if we could pull off a $200,000 increase in what we pay to the farmers. But it's certainly not helpful, from my perspective, to us or them, with the tariff situation getting involved."

Margins throughout the industry are already thin as they try to balance the costs of product, labor, and shipping, paying farmers sustainable prices, and charging consumers a price that's competitive.

Stone Creek recently adjusted prices to account for the commodities increase.

Tariffs are not yet forcing prices higher, but sellers must watch the market to see what's next.

Pond said, "There are a lot of other small businesses that are going to be impacted by these tariffs, and some of us are on the razor's edge in terms of staying in business year over year."

He said Stone Creek aims to be transparent with customers about any changes in price and the reason for them.

But as an illustration of how fragile a commodities market can be, he said they also try to be transparent with their overseas farmers, as US pricing and buying could impact foreign agriculture.