Musk and Trump’s ‘Plutocratic Coup’ Could Upend the Coffee Industry

It has been a wild few weeks in American politics. Following his inauguration on January 20, President Donald Trump has taken up his old strategy of antagonising foreign powers, signing executive orders of dubious legality, and attempting to forcibly shape the country to his will.

In short order, he has threatened or incited trade wars with Canada, Mexico, China, and Colombia; rolled back federal diversity, equity, inclusion, and accessibility initiatives; withdrawn from the World Health Organization; “paralyzed” the National Labor Relations Board by firing one of its members; moved to curb transgender rights and blocked trans women from playing women’s sports; and so much more.

The particulars have changed—and grown more extreme—but the opening shock-and-awe strategy feels reminiscent of Trump’s first term. What is new is Elon Musk’s parallel ploy to grab power by bulldozing his way through the federal government.

Under the aegis of his so-called “Department of Government Efficiency”, or DOGE (an extremely dumb reference to an old meme and its associated cryptocurrency), Musk has thus far gutted the United States Agency for International Development (USAID), firing most of the agency’s workforce; gained control over the U.S. Office of Personnel Management, essentially the federal government’s HR department; accessed the Department of Transportation, Federal Aviation Administration, and the Consumer Financial Protection Bureau; and been given control over the Treasury Department and its payment system.

As Marisa Kabas wrote in The Handbasket, “Elon Musk has, for all intents and purposes, taken control of the inner-workings of the federal government”. (It’s worth emphasising that many, if not all, of these “cost-cutting efforts” are illegal or unconstitutional.)

The goal is clear: “Moment by moment, Musk and his strike force of greasy Beavisoid wreckers are rats in the walls, gnawing hideously through the wiring in search of richer fare”, wrote David Roth in Defector. “There is public money in there somewhere, and they believe it is theirs by right”.

The scale and pace of this ongoing destruction is hard to comprehend, and will have dire consequences for millions of people, as well as turbulent impacts on the global economy. While it often seems to want to stand aside from politics, the coffee industry is certainly not immune from Musk and Trump’s actions.

In fact, the ongoing assault on the federal government is already having downstream impacts on the coffee sector across the world. Cancelled USAID funding has put scores of international coffee projects in jeopardy, while the most recent surge in commodity prices is at least partially because of Trump’s tariff threat against Colombia. Attempts to dismantle the NLRB could also effectively halt domestic coffee workers’ unionisation efforts.

The extent of the damage will take time to fully grasp, but it’s clear that the coffee industry as we know it today is at risk of becoming another casualty of what Rep. Alexandria Ocasio-Cortez called “a plutocratic coup”.

Impacts Along the Supply Chain

As soon as he re-entered the White House, Trump ordered a pause and review of all foreign aid. Musk—who, it should be stressed, was not elected by anyone, he is merely a “special government employee”—immediately took aim at USAID, calling it “a criminal organization” and ordering it to be shut down and the remains merged with the State Department.

USAID is a foreign aid and development agency that accounts for more than half of all U.S. overseas assistance. While it has a history of links to the CIA and involvement in foreign political influence projects, the agency has helped countless millions around the globe since its founding in 1961. One single initiative, the President’s Emergency Plan for AIDS Relief (PEPFAR), has saved more than 25 million lives since it was established in 2003. All this from an agency that accounts for less than 1% of the federal budget—not exactly a prime candidate for cuts made in service of “efficiency”.

USAID’s role in global health and development is vast, and the consequences of its shuttering are already being felt. The funding freeze has directly claimed lives, while HIV patients have been turned away from PEPFAR clinics.

Meanwhile, thousands of USAID workers have been dismissed while current projects have been left in limbo, many of which are coffee-specific. Nick Brown at Daily Coffee News put together a list of some of them. They range from building coffee academies in Burundi and contributing to World Coffee Research’s coffee-breeding programs to funding agroforestry projects in Indonesia.

As Brown notes, USAID has been a key source of public funding for the coffee industry for years—it helped launch the inaugural Ethiopia Cup of Excellence in 2020 and worked to combat the coffee leaf rust epidemic in Central America in 2014. Going back further, USAID invested in rebuilding Rwanda’s coffee sector in the years after the genocide, while funding from the agency has also encouraged farmers in Colombia to switch from coca to coffee production.

Importantly, USAID was a key source of funding for climate-related projects. “The industry has reduced sustainability to mean damage reduction”, says Melissa Wilson Becerril, impact manager at Cooperative Coffees.“Market-based solutions replicate this short-sightedness, reducing planetary processes like carbon storage or soil regeneration to quarterly performance metrics. We lost the biggest source of funding for climate action overnight with the dismantling of USAID”.

The agency’s work helped the coffee industry in more subtle ways as well. USAID has partnered with thousands of organisations that help farming cooperative members access support ranging from financing to crop insurance. According to Becerril, such partnerships help co-ops “show their value to farmers to encourage them to deliver coffee at a time when they don’t have financing to compete with local market price, which is now very high”.

Then there are USAID’s indirect impacts on the coffee industry. For example, coffee farmers in Central America have struggled with a lack of workers, many of whom have migrated north to the United States. USAID, for more than a decade, has been funding development programs in the region designed to address climate change and encourage people to stay in their countries. Shuttering those programs, as George Mason University professor Michael A. Clemens told the New York Times, “leaves migration as the only viable way for many families in the Western Hemisphere region to cope”.

Big, Beautiful Tariffs

It’s not just the DOGE crime spree that is causing chaos within the coffee industry. At the end of January, Trump announced a blanket 25% tariff on all goods imported from Colombia after a disagreement over deportation flights, before quickly backing down. However, even the threat of import taxes on the country—which provides upwards of 30% of all coffee imported into the U.S.—was enough to scare a coffee market already primed for volatility following price increases of more than 100% over the past year. 

“When President Trump even makes threats about tariffs, the minute you introduce uncertainty into a global trade system, and that’s what global trade is, things are going to get a little crazy”, Dan Gardner, president of logistics firm Trade Facilitators, told CNN.

Then there is Trump’s insistence on stoking trade wars with the United States’ closest neighbours, Canada and Mexico, not to mention its biggest rival in China, by announcing tariffs on all three (although those on Canada and Mexico have since been delayed). All three countries have vowed to respond with tariffs of their own, while Trump doubled down and threatened reciprocal tariffs on all U.S. trading partners.

“If [Trump] puts tariffs onto Colombian or Mexican coffee, that would be brutal. It would absolutely crush things”, says Brendan Adams of Semilla, a specialty coffee importer based in Canada. “At the very least, it’s a massive amount of uncertainty, especially with the market being where it is. If he manages to land any of these blows from the origin-based countries, especially the Mexico side, that’s going to be really crippling for anybody who does coffee from those places, especially given that Mexican coffee is already incredibly expensive”.

The U.S. is the largest export market for Mexican coffee, with 68% of all exports heading north in 2022, while Mexico represents the sixth-largest import origin for coffee into the U.S. Number four? Canada (thanks mostly, Adams says, to the decaffeination giant Swiss Water Decaf). Between them, the two countries were responsible for more than $1 billion worth of coffee imports into the U.S. in 2022. Because tariffs are duties placed on the importing country rather than the exporter, any increase in costs will likely be passed onto the consumer.

It’s fair to say that Canadian coffee roasters are worried about what these potential tariffs could mean for their businesses. “I asked my customs broker, and they said tariffs are only on products made and/or transformed in the USA or Canada, so all the [green] coffee I store in the USA is unaffected”, says David Lalonde of Montreal-based Rabbit Hole Roasters. “But I ship 35% of my volume to the USA, so if people now have to pay 25% more it might truly hurt us, because many will stop ordering—especially wholesale”.

And it’s not just beans that could be impacted by Trump’s tariffs. China, for example, produces the majority of global coffee packaging, as well as machinery like green coffee sorters and bag sealers. Does your company sell canned ready-to-drink cold brew? Aluminium is one of the materials specifically being targeted by prospective tariffs. Consumer-level coffee products like grinders and brewers that are made in China could also see price increases once, or if, the tariffs kick in, as retailers raise their prices to cover the increased costs.

There’s a lot of “could” and “might” here, because these tariff plans are extremely chaotic and subject to change (much like the people responsible for them). This could all be out of date in a week, or even a day. But whatever comes to pass, it still adds up to more uncertainty for the coffee industry.

A Union-Busting Crusade

Much like their attacks on the regulatory and administrative state, Trump and Musk’s assault on the U.S. Department of Labor and National Labor Relations Board has been swift—and, for Musk at least, self-serving. The DOL and its regulatory agency, the Occupational Safety and Health Administration, have been investigating Musk-run companies like Tesla and SpaceX. The NLRB, meanwhile, is considering 12 unfair labour practice allegations brought by unionising Tesla workers. 

In anticipation of a planned incursion on February 4, a coalition of unions filed a lawsuit asking a federal court to block Musk’s DOGE flunkies from gaining access to DOL systems. A judge refused, and as Kim Kelly reported for In These Times, workers were told to give DOGE access. “I work for the American people,” one DOL worker told Kelly. ​“To turn over their data to a bunch of idiots without proper clearance feels wrong”.

Trump has also fired a member of the NLRB—the first time in its history that a president has done so—leaving the board with just two members, one fewer than the number it needs to function. That board member, Gwynne Wilcox, filed a lawsuit over her firing, and House Democrats have called on Trump to reinstate her. “I handled cases where workers were fired and retaliated against for their conduct, but I never imagined that I would be the person being fired for doing my job”, Wilcox told CBS News.

All of this leaves ongoing labour battles up in the air. Amazon-owned Whole Foods has already filed to dismiss the results of a union election at one of its Philadelphia stores, something one labour lawyer called “insane”. According to the NLRB website, there are currently 70 open cases including the word “coffee”, eight of which are union representation petitions. The companies involved range from small cafes to chains like La Colombe, Peet’s, and of course Starbucks.

What the outcome will be for those cases remains to be seen, but the vehemently anti-union Musk seems intent on destroying the NLRB completely. SpaceX, along with Amazon and Trader Joe’s—and maybe Starbucks, although the company denies this—has challenged the very constitutionality of the board.

As law professor Kate Andrias wrote in The Conversation, “Currently, it can be very difficult for workers to organize unions, partly because of insufficient penalties and protections in labor law. But if the corporations win, there will no longer be an agency in place to safeguard workers’ rights to organize unions and to negotiate fair contracts with their employers”.

What’s Next

The whirlwind is likely to continue for the short term—as Brian Barrett wrote in Wired, Musk is enacting Silicon Valley’s mantra of “move fast and break things”, but “it feels like no one should have to say this, and yet we are in a situation where it needs to be said, very loudly and clearly, before it’s too late to do anything about it: The United States is not a startup. If you run it like one, it will break”.

Musk’s pitch for DOGE is that it will “cut government waste” and “promote efficiency”. But DOGE is less helpful cost-cutter than naked heist, an attempt to hamstring the federal government and get ahold of the pursestrings. The progressive organising group Our Revolution called Musk’s actions “a Trojan horse for dismantling public institutions and replacing them with private, profit-driven control”.

I want to share a little nugget I came across while researching this article: Unlike many private workplaces, the government generally doesn’t provide free coffee for its workers, specifically because it doesn’t want to be accused of “wasting taxpayer money”. If federal workers want to drink coffee at work, they have to bring their own or pool their money into a “coffee club”. Meanwhile, the world’s richest man is tweeting conspiracy theories about fraud at USAID.

David Roth in Defector sums it all up neatly: “Doing the work that these captive agencies do—doing, even, the bad things that people and institutions can do—takes knowledge and care and collaboration. You can’t build something, or improve or maintain something that anyone else built, without that knowledge and care. But anyone can swing a hammer, and someone sufficiently eager to swing that hammer won’t really need to know or care where they’re swinging it provided they keep doing so”.

It’s impossible to predict where all this upheaval will end, but it’s clear that much of the coffee industry will be affected. From price spikes to lost funding to slashed labour protections, stakeholders across the industry are facing profound and perilous disruptions. For the sake of its future, the coffee industry needs to understand what’s happening, and take action where it can.

The biggest coffee companies already do a fair bit of lobbying, and could be influential if pushed. If the USAID shutdown is permanent, the private sector will need to contribute more to help offset that huge loss. As I’ve written before, multinationals are very happy to brag about their philanthropy—now’s the time to step up. Coffee shops, meanwhile, have a long history of acting as organising spaces and centres of community, which will be needed now more than ever.

Whether Musk and Trump’s ongoing coup can be stopped is hard to say, but the downstream effects will be far-reaching. Whatever happens, the entire coffee industry needs to brace for volatility.