Jakarta. Trade wars, like hot drinks, have a way of burning those who consume more than they produce.

America’s latest tariff surge is rippling through global markets and kitchen cupboards. According to the Bureau of Labor Statistics, coffee prices in the US jumped 14.5 percent in July from a year earlier, pushing the average cost of a pound of ground beans to $8.41.

Food inflation overall has stabilised at 2.9 percent year-on-year, but the items most dependent on imports are climbing steeply.

The reason is Washington’s tariff wall. Donald Trump's administration’s predecessor in US protectionism was Franklin Roosevelt’s America of the 1930s, Today, the average tax on imports stands at 18.6 percent, the highest since then. Most countries face a levy of 15 percent, while several countries in Asia, including Indonesia, are hit with 19 percent. Some products endure rates as high as 50 percent.

For coffee, the consequences are obvious. The United States grows none of its own beans, relying on imports from Brazil, Vietnam, Colombia and Indonesia. With Indonesia now subject to a 19 percent tariff, the cost is almost certain to be passed on to American households. “Everything they drink is imported,” said Pranoto Soenarto of the Indonesian Coffee Exporters Association. The tariffs, he argues, punish consumers more than producers.

Other sectors are no less exposed. Yale University’s Budget Lab estimates that shoe prices will temporarily spike by 39 percent and remain nearly a fifth higher in the long run. Apparel shows a similar pattern, with costs projected to rise 18 percent above current levels. Meanwhile, the US Wine Trade Alliance warns that a 15 percent duty on European wines and spirits could wipe out $2 billion in sales and 25,000 American jobs. With inventories of French vintages running down, the group expects retail prices to rise by 30 percent in September.

For Indonesia, the picture is mixed. The US tariffs bite hardest in labour-intensive sectors --textiles, footwear, furniture and tyres-- where America remains a vital buyer. Josua Pardede of Bank Permata cautions that reciprocal tariffs, introduced on Aug. 7, threaten to undercut competitiveness in industries employing millions. Exporters of fish and processed seafood also face steeper barriers.

Yet Indonesia is hardly without options. The recently concluded Indonesia–EU Comprehensive Economic Partnership Agreement (IEU-CEPA) eliminates tariffs on nearly all goods. For export-oriented firms, particularly in manufacturing and agriculture, Europe represents an alternative growth engine. “Labour-intensive products will see significant gains from tariff elimination, especially given Europe’s large demand potential,” says Josua.

Indonesia’s overall export performance remains robust. Shipments in the first half of 2025 climbed 7.7 percent year-on-year to $135.4 billion, led by China, the US, India, Japan and Malaysia. To sustain momentum, policymakers are urging diversification. Coffee, cocoa, rubber and palm oil --commodities that face little direct competition in America-- could be the focus of tariff negotiations. Meanwhile, exporters are being encouraged to invest in certification and product standards to meet European and Asian requirements.