‘Anxiety, turmoil and stress’: Wisconsin coffee shop owners brace for tariffs

Austin and Hannah McCourt purchased Badger Brothers Coffee in downtown Platteville in January 2020, just before the world shut down at the start of the COVID-19 pandemic. The coffee shop, which has changed ownership three times since it opened in 2003, withstood the challenges the pandemic brought to small businesses.

But now, Austin McCourt said, he and other local Wisconsin coffee shops are facing another hurdle: President Donald Trump’s tariffs.

Trump placed 10% tariffs on goods imported into the United States from almost all countries on April 2, with heftier reciprocal tariffs on some countries set to go in effect on July 8. Trump has said the tariffs are in place to spur more production in America. The tariffs are broad taxes on most imported goods, from computer parts and toys to avocados and coffee.

The U.S. imports the second-largest amount of coffee in the world, according to the U.S. Department of Agriculture. Due to climate, coffee can only grow in the U.S. in a few small areas in Hawaii and Puerto Rico, meaning the country simply can’t produce enough beans for Americans to get their caffeine fix.

“There is no replacement. There is no bringing coffee back to the U.S., right? It doesn’t grow here. Period. And so that, for us, feels [like] this crazy tax on our business and consumers,” said TJ Semanchin, co-owner and president of Wonderstate Coffee, which is based in Viroqua.

Wonderstate started as a coffee roaster in 2006 and has since opened three coffee shops across Wisconsin. Semanchin said the tariffs feel “as chaotic as during COVID” for his coffee business.

Wonderstate is expecting its first shipment with the new tariffs in a few weeks, raw coffee — also known as green coffee beans — from Ethiopia. It’s a $200,000 shipment, Semanchin said, and he’s expecting the 10% baseline tariff to tack on roughly $20,000 in additional costs. The coffee company has considered taking out a loan to help pay these extra costs while they figure out how to pay for the tariffed beans moving forward.

Wonderstate and Badger Brothers both import coffee from the coffee-producing countries of Colombia — which supplies 20% of America’s coffee — Ethiopia, and Honduras. Wonderstate also imports from Peru, Mexico, Guatemala, Kenya, the Democratic Republic of the Congo, and Burundi. Trump briefly threatened in January to impose a 50% tariff on goods from Colombia.

Semanchin said the tariffs have been difficult to prepare for because of how quickly things have changed. “This is just chaos,” he said. “You can’t prepare for it, because it’s just coming so fast and furious and it’s changing so fast.” Wonderstate will not preemptively raise the prices it charges customers, but it is planning for potential increases in the future. Semanchin said a cup of coffee might cost a quarter more, while a bag of coffee might be $1 or $2 more.

“It hurts the small business. There’s no other way around it. I mean, however the administration is spinning this, it just makes our job that much harder, and it impacts our bottom line, and it impacts our ability to invest in our staff, in our growth. It’s crazy-making,” Semanchin said.

Austin McCourt plans to place a “Trump tariff surcharge” on all of his products to communicate to his customers why the price has gone up. He said his regulars have told him they’re willing to pay the extra fee if it means keeping the coffee shop open.

“In my opinion, [Trump is] causing anxiety, turmoil and stress on people who are already having a hard-enough time getting by,” Austin McCourt said. While Trump claims to want to protect Main Street, not Wall Street, he said, the tariffs are disrespectful to small businesses.

When asked during a May 4 interview on NBC News’ “Meet the Press” about providing relief to small businesses, Trump said: “They’re not going to need it. They’re going to make so much money.”

“We’re married with two kids. We came from nothing, and we worked our way up through college to be able to be blessed enough to purchase a coffee shop and live the American dream, literally on the middle of Main Street in a college town, right? We are there, we did it,” Austin McCourt said. “But now we’re being tossed around and having to make financial decisions that shouldn’t have to be made solely because a few billionaires in a seat of power are pulling the strings.”

The National Coffee Association and the coffee broker Badger Brothers Coffee uses to purchase green coffee are both advocating for an exemption to the tariffs.

In a video posted to social media on April 10, Semanchin encouraged customers to reach out to their elected officials and tell them how they feel about the impact of tariffs on their morning cup of coffees.

Coffee is a luxury, Austin McCourt said, and he worries that higher prices might keep some of his regulars — some have been visiting Badger Brothers for 22 years — away. But he also hopes that these longtime relationships and conversations with regular customers will help the coffee shop weather the storm.

“I have college professors, I have blue-collar workers, I have politicians that come through this coffee shop when they’re visiting the university, I have nurses traveling, doctors, you name it. I have people from all over, and in the last 14 weeks,” since Trump has been in office, Austin McCourt said, “I have never had so many concerned customers asking if I’m OK and what they need to do to help. So that gives me hope.”