YOUNGSTOWN, Ohio – Levi Binsley-Smith had a hunch more tariffs were coming.
Earlier this year, the owner of Trek Coffee House at 1588 Mahoning Ave. decided to consolidate his roasting operation from his building next door to the back room of his coffee shop and phase out the company’s wholesale business.
“It was growing, but I very quickly realized that we’re either going to live or die,” he said. Tariffs enacted this year by the Trump administration prompted him to concentrate on his roasting and retail business, as prices skyrocketed for bulk wholesale coffee beans, he said.
Had he continued to pursue the wholesale market, Binsley-Smith said that he wouldn’t have been able to pass on the sort of price hikes to cover his costs. “All it would have taken is this 50% increase, and I’d be putting the house on the market,” he said.
At midnight Aug. 7, a fresh round of tariffs ranging from 10% to 40% imposed by the Trump administration took effect, impacting approximately 90 countries that import goods to the United States.
Among the administration’s main targets is Brazil, which faces a 40% tariff on imports to the U.S., especially coffee.
Tariffs are taxes placed on goods coming into the United States that importers must pay the U.S. Board of Customs. These importers generally pass the higher costs on through the supply chain, some of which trickle down to the end-user or customer.
“Brazil and Vietnam are the two top exporters of coffee in the world, and Brazil is No. 1,” Binsley-Smith said. A large part of the wholesale business relied on beans imported from Brazil, which he roasted and then sold to other cafes in the region. Today, the company is engaged in the wholesale trade on a very selective, limited basis.
Since he’s largely shed that part of the business, the company is less exposed to the massive spikes expected for Brazilian coffee, Binsley-Smith said. Trek’s business model shifted months ago to concentrating on retail sales of specialty coffees that are sourced from other parts of the world, including some from Brazil, he said.
“For our own shop, we do a lot of African coffees, and sell coffee from Honduras, Colombia, and Costa Rica,” he said.
Still, the small coffee shop on Youngstown’s west side had no other choice but to raise prices because of both anticipated and previously enacted tariffs, Binsley-Smith said. The most recent price increases occurred in April, he noted. A small cup of regular house coffee, for example, jumped from $2 to $3. “We added a little bit of cushion so we wouldn’t have to do it twice,” he said.
However, the price of a specialty a 16-ounce bag of single origin coffee, for example, is almost $18. “They’re going to be close to $20 by the end of the year,” he projects.
Binsley-Smith said it’s difficult to lower prices, since the Trump administration in the past has announced protectionist levies only to pause them shortly afterward.
The latest round of tariffs will undoubtedly have an impact on smaller operations across the region, he adds.
“It’s going to eat up the small guys,” Binsley-Smith said. “I think you’ll see them evaporate pretty quickly.”
TARIFFS HIT HOME
Businesses the size of multinational corporations to corner coffee shops are feeling the sting of a trade war that continues to intensify, as these tariffs wind their way through the economy.
In April, the Trump administration slapped a 25% tariff on all vehicles imported to the United States. On Aug. 7, Toyota reported that these levies had cost the company approximately $3 billion during the second quarter of this year.
Tariffs have also impacted domestic automakers as well. General Motors Co. reported that tariffs cost the company $1.1 billion in the second quarter, and could cost the Detroit automaker between $ 4 billion and $5 billion by the end of this year. Ford Motor Co. also said tariffs impaired its profits by $800 million during the second quarter and could cost the company as much as $3 billion by the end of 2025.
The administration has aggressively pursued the new tariff policy to correct what President Donald Trump has said is an unfair trade imbalance between the U.S. and the rest of the world. The objective is to raise revenue to pay down the national debt, to negotiate trade deals more favorable to the United States, and to secure commitments from other countries to invest in the U.S. and boost American manufacturing.
Last week, the Trump administration announced that tech giant Apple had pledged to invest another $100 billion in U.S. manufacturing operations. This is in addition to the company’s commitment earlier this year to spend $500 billion toward increasing domestic production.
Since the initial tariffs were enacted in April, the U.S. has collected more than $136 billion, or three times the amount realized over the same period in 2024. In the meantime, the U.S. has reached trade agreements with the European Union, the United Kingdom, Japan, Vietnam, Indonesia, South Korea, and the Philippines.
Other major trading partners such as Canada and Brazil are subject to the new rates, while negotiations are underway with China and Mexico with deadlines looming.
Yet the overall manufacturing economy has thus far demonstrated signs of softening, according to the Institute for Supply Management’s July manufacturing business survey.
Data show that the manufacturing purchasing management index, or PMI, contracted in July, dropping to 48% from 49% the previous month.
“In July, U.S. manufacturing activity contracted at a faster rate, with declines in the Supplier Deliveries and Employment Indexes contributing in the biggest factors in the one percentage-point loss,” said Susan Spence, chair of the ISM Manufacturing Business Survey Committee.
Mousa Kassis, director of the Ohio Small Business Development Center’s Export Assistance Network, said the data reflects a slowdown in the manufacturing sector since March.
“It’s been below 50% over the last three months,” he noted.
Kassis also observed that hiring in the manufacturing sector has also started to stall. “There are really no mass layoffs or high unemployment, but we’ve seen a slow down in hiring and investment.”
This is likely due to uncertainty in markets brought on by the U.S. attempts to realign global trade, he said. At present, tariffs on imported goods to the U.S. stands on average at 18%, compared to 2.3% a year ago.
“The tariffs are here to stay,” Kassis said, which is central to the Trump administration’s strategy to levy tariff rates across the board at approximately 15%. “Manufacturers, retailers, and consumers will have to live with the fact that prices are going to go up somehow,” he said.
In the meantime, small businesses such as the Trek Coffee House have had to take measures and adjust their strategies in a trade climate that’s turned volatile.
“We’ll make the hard choices and survive whatever comes,” Binsley-Smith said. “We’ll be fine.”
Pictured at top: Levi Binsley-Smith of Trek Coffee House with coffee roasting equipment.