Tariffs come for your morning cup of Joe

Summary

Marketplace Morning Report: “Tariffs Come for Your Morning Cup of Joe”

Date: August 26, 2025
Host: David Brancaccio

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Brief Overview

This episode of the Marketplace Morning Report covers two major economic stories:

1. Unprecedented White House pressure on the Federal Reserve, with President Trump seeking to fire Fed Governor Lisa Cook over allegations of mortgage fraud.
2. The far-reaching effects of new 50% tariffs on Brazilian coffee, threatening both coffee prices for consumers and the viability of small U.S. importers.

In just under 10 minutes, the episode explores the economic, political, and personal consequences of these breaking developments, using direct insights from key players and market experts.

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Key Discussion Points & Insights

1. White House vs. The Fed: Trump Attempts to Oust Lisa Cook

(00:43 - 03:26)

• Issue at Hand:
  • President Trump claims to have fired Fed Governor Lisa Cook for alleged mortgage fraud, but Cook refuses to step down, saying the president lacks such authority.
• Legal Context:
  • Removal of a Fed governor requires cause, as stated in the Banking Act of 1935, and mortgage fraud allegations alone may not qualify.
  • Lisa Cook, via her lawyer, insists, “no cause exists for her firing. Trump does not have the authority to remove her, and she'll continue to carry out her duties.” (01:53)
• Potential Consequences:
  • If Cook is forced out, there will be two open seats on the Board, enabling a majority of Trump appointees, raising concerns about the Fed’s independence.
  • Expert Insight:
    • Alex Haquez (Groundwork Collaborative) warns that politicizing the Fed “is only going to drive up interest rates and … filter through the rest of the economy. It’s going to hit people, their mortgages, on their credit cards…” (02:38)
  • Economic Mechanism:
    • Even if short-term rates are cut, market distrust in Fed independence could push long-term rates (like mortgage rates) higher—“the exact opposite of what Trump wants.” (02:57)

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2. Tariffs and Your Coffee: 50% Import Tax on Brazilian Coffee

(03:26 - 06:53)

• The Tariff Impact:
  • President Trump’s new 50% tariff targets coffee beans from Brazil, the largest supplier to the U.S.
• On-the-Ground Perspective:
  • Peter Longo, owner of Puerto Rico Importing Company in NYC (est. 1907), illustrates the cost impact:
    • “This is a bag of 50 pounds of Brazilian French Roast. It would have been $147.50 before the tariff and $359.50 after the tariff.” (03:50)
    • “If we're selling coffee for $15.99 and there's a 50% tariff, that coffee is going to go up another $8. That's going to be in the 20s. That's crazy. People won't buy it… $30 a pound. That's ridiculous.” (04:21 - 04:36)
• Economic Rationale and Reality Check:
  • Tariffs are meant to encourage U.S. production and lower trade barriers abroad, but coffee is largely not grown in the U.S., except in Hawaii, Puerto Rico, and a “tiny slice” of California, none of which can meet U.S. demand.
  • Americans drink “450 million cups of coffee every day,” making tariffs on coffee a direct hit for consumers and importers.
• Business and Human Impact:
  • Longo shares the stress of running a business under these conditions:
    • “Horribly stressed. Horribly stressed. It keeps me up at night because you have to try to figure out a way to manage your cash flow to anticipate what's coming.” (06:02)
    • “So if we have to shrink, we'll shrink. And if we have to shrink to the point where we go out of business, there's nothing I can do about it. And we'll do the best we can.” (06:30)
  • Despite this, Longo bets that American devotion to morning coffee will keep his business afloat, even at higher prices.

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3. Additional Market News: Nissan’s Sharp Drop in Tokyo

(06:53 - 07:22)

• Nissan Motors’ shares fell by 6.25% in Tokyo.
• Mercedes-Benz (its second-largest shareholder) announced a full divestment—a “routine portfolio pruning” tied to pension fund management.
• Nissan faces heavy restructuring, including 11,000 layoffs announced earlier in the year.

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Notable Quotes & Memorable Moments

• On Fed Governance:

  • “Cook says she’s not leaving, and evidence for the allegation, if any, has not been shared publicly.” – David Brancaccio (00:43)
  • “The Fed was just doing what the president wants, not what’s good for the economy.” – Nancy Marshall Genzer (02:20)

• On Tariffs and Coffee:

  • “That’s going to kill the market for Brazilian coffee, which is I guess the purpose.” – Peter Longo (04:36)
  • “Coffee isn’t really grown in the U.S. It can’t be. It’s a tropical fruit that grows in a narrow strip of land around the equator.” – Marketplace narration (05:03)
  • “This is how I make my living. So if we have to shrink, we’ll shrink… and if we have to shrink to the point where we go out of business, there’s nothing I can do about it.” – Peter Longo (06:30)

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Timestamps for Key Segments

• 00:43–03:26: Trump moves to fire Fed Governor Lisa Cook; implications for Fed independence and markets.
• 03:26–06:53: 50% tariffs on Brazilian coffee; interviews with importers and the real-life impact for sellers and consumers.
• 06:53–07:22: Nissan Motors stock dive following Mercedes-Benz divestment.

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Tone and Language

The episode maintains Marketplace’s hallmark tone: brisk, informative, and focused on connecting national economic policy to everyday life. Commentary by business owners adds urgency and humanity, especially in discussions of tariff impacts.

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Summary: Why It Matters

For listeners:
Today’s episode unpacks how high-level political maneuvers—whether at the Federal Reserve or through tariff policies—have cascading consequences for markets, small businesses, and daily life. From rising coffee prices to anxiety about central bank independence, Marketplace highlights why these business headlines matter for all Americans—especially before that first sip of coffee.

Transcript

[A]

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[B]

Hey, hate to do this.

[C]

Could we reschedule our morning hike? I was just about to ask the same next week.

[B]

Yes, it's Dunkin Original Blend time.

[C]

Staying at home with Duncan? Don't mind if I do.

[D]

The home with Duncan is where you want to be when a president says a central banker is fired, but she's not president, I'm David Brancaccio. President Trump says he is immediately firing Federal Reserve Governor Lisa Cook for alleged mortgage fraud. Cook says she's not leaving, and evidence for the allegation, if any, has not been shared publicly. And unlike, for instance, the head of the President's Council of Economic Advisers, Cook does not serve at the pleasure of the president. And experts say she can only be removed if cause is established. Marketplace Washington correspondent Nancy Marshall Genzer joins us now. What's the claim regarding Cook and Trump.

[E]

Is referring to allegations that Cook claimed two houses as her primary residence on mortgage applications. Mortgage rates on second homes can be higher than rates for your primary residence. But the Banking act of 1935 says Fed governors can only be fired for cause. And it's not clear that even if Cook did this, it would be cause enough to fire her.

[D]

And Cook says she's not stepping down. What's the next step? Maybe court?

[E]

It certainly looks that way, David. In a statement through her lawyer, Cook says no cause exists for her firing. Trump does not have the authority to remove her, and she'll continue to carry out her duties.

[D]

But let's say Cook is forced out. The president can then fill two vacancies on the Fed Board of governors, which would mean a majority of Trump appointees on that powerful board. They might be independent minded, but they might not be.

[E]

And markets would be afraid. The Fed was just doing what the president wants, not what's good for the economy. If investors lose confidence in the Fed, they'll demand higher interest rates to hold U.S. bonds. And I spoke about this with Alex Haquez. He's with Groundwork Collaborative A progressive economic think tank.

[F]

All of these moves that Trump is making, that is shaking confidence in the US Is only going to drive up interest rates and certainly long term rates for treasury bonds, which is going to filter through the rest of the economy. It's going to hit people, their mortgages on their credit cards because the market.

[E]

Controls those longer term interest rates. So even if the Fed were lowering short term rates, you could still end up with higher rates for things like mortgages. The exact opposite of what Trump wants.

[D]

Back to our tariff. Beat the import taxes President Trump is using to reshape the world order, the US labor market and the prices we pay for nearly everything today. Coffee beans from Brazil, which is facing a 50% US tariff. US importers are paying more for coffee wholesale and it's rather difficult to grow coffee beans in the US the BBC's Erin Delmore filed this report for us.

[G]

This is a bag of 50 pounds of Brazilian French Roast. It would have been 147.50 before the tariff and 359.50 after the tariff.

[B]

Peter Longo's Puerto Rico Importing Company has been a staple on New York City's bleecker Street since 1907. A best seller is Cafeblend. It's reliant on Brazilian beans. They're now subject to a 50% import tax thanks to President Trump's tariffs.

[G]

The amount of the tariff is so large that it's going to really affect the price of the coffee. So for instance, if we're selling coffee for $15.99 and there's a 50% tariff, that coffee is going to go up another $8. That's going to be in the 20s. That's crazy. People won't buy it. You know, $30 a pound. That's ridiculous. That's going to kill the market for Brazilian coffee, which is I guess the purpose. They want to punish Brazil for whatever reason, so they're putting a draconian tariff on it. More production at home will mean stronger competition and lower prices for consumers.

[B]

President Trump is remaking the global trade world order through tariffs, charging importers like Peter a fee to bring products in from other countries. The goal is to get foreign countries to lower trade barriers and to make foreign made products more expensive so that American made products are more competitive and eventually preferred. That in turn would spur more manufacturing and production of goods right here in the usa. But coffee isn't really grown in the US it can't be. It's a tropical fruit that grows in a narrow strip of land around the equator. It does grow in some parts of Hawaii and Puerto Rico and a tiny slice of Southern California. But. But that's not enough to supply the 450 million cups of coffee Americans drink every day. And so virtually all of it has to be imported. That's why tariffs on coffee producing countries, and especially those 50% tariffs on Brazil, which provides around a third of all coffee consumed in the US Is making life hard for importers and sellers like Peter.

[G]

Horribly stressed. Horribly stressed. It keeps me up at night because you have to try to figure out a way to manage your cash flow to anticipate what's coming.

[B]

The stakes were high before tariffs were even announced. Back in February, the global price of arabica coffee hit its highest point on record. Even though that's come down a bit, roasted coffee cost consumers 15% more last month than it did a year prior. All of that puts pressure on sellers like Peter.

[G]

This is how I make my living. So if we have to shrink, we'll shrink. And if we have to shrink to the point where we go out of business, there's nothing I can do about it. And we'll do the best we can.

[B]

But he's betting that that morning cup of joe is something people will keep shelling out for even if it costs them more. I'm the BBC's Erin Delmore for Marketplace.

[D]

And stock in Nissan Motors fell hard in Tokyo today, closing down six and a quarter percent. This after Nissan's second largest shareholder said it's selling its whole stake. That shareholder is Mercedes Benz of Germany, which suggests this was a routine portfolio pruning of its pension fund. There's a big overhaul going on at beleaguered Nissan, which announced 11,000 layoffs this spring. I'm David Brancaccio. Marketplace Morning report from APM American Public Media.

[C]

The Trump administration is making deep cuts to education research.

[B]

The cancellation notices started coming.

[D]

When the contract is cut, the study just dies.

[C]

It's all happening just as schools are trying to make use of research to improve reading instruction.

[D]

There would not have been a Science.

[G]

Of Reading without the federal funding.

[E]

It wouldn't have happened.

[C]

I'm Emily Hanford. On our new episode of Soul to Story, what the Trump cuts mean for the science of reading. Go to your podcast app and follow Sold a story.