There has been plenty of news coverage and analysis of the impact of President Trump’s tariffs on stock prices, consumer costs and global trade, but what about the impact on increasing poverty and human suffering around the world? What will happen to fair trade?
Fair trade is a set of ethical standards for buying and selling goods—like coffee, cocoa, tea, bananas, and handicrafts—that prioritizes fair prices for producers, safe working conditions, environmental sustainability and the empowerment of marginalized communities.
The concern is that the noble efforts of fair trade could be crushed under the heel of a global recession and reduction to American markets for high quality, ethically sourced and frequently more expensive good.
At midnight on April 9, U.S. Customs is expected to start collecting new tariffs on imports from 86 countries. President Donald Trump ordered the sweeping tariffs calling the expansive mandate necessary for long term American best interest.
Trump claims that a 10% tariff on all nations and much higher rates of up to 50% on individual countries will boost the U.S. economy and protect jobs. Most economists disagree. They say the additional costs on imports will harm the world economy and push up prices for consumers in the U.S. and around the globe.
It’s estimated that for the average household in America the tariffs will add an annual cost of $4,000 for their grocery bill and remove some items entirely from their typical supermarket shopping list as prices for items such as frozen fish, rice and spices from the around the world will soar.
The predicted impact of the tariffs is a global recession that will impact every corner of the world, but it will especially hit hard the most vulnerable workers. Global food producers, particularly those cultivating coffee, cocoa, and rice will be especially negatively impacted. These tariffs have introduced economic challenges for producers and consumers alike, especially in countries like Vietnam, Sri Lanka, and the Philippines, where fair trade practices are vital for livelihoods.
Vietnam, the world's second-largest coffee producer, faces a 46% tariff on its exports to the U.S. This substantial increase threatens the competitiveness of Vietnamese coffee in the American market, potentially reducing demand and income for local farmers. Similarly, Indonesia, another key coffee producer, has been hit with a 32% tariff, further complicating trade dynamics in the region.
Sri Lanka is contending with a 44% tariff, which poses risks to its agricultural exports, including tea and spices. These tariffs could undermine the nation's economic stability and disrupt the livelihoods of small-scale farmers who rely on fair trade agreements to secure equitable prices for their products.
Farmers engaged in fair trade practices can expect to encounter reduced demand and lower prices, exacerbating economic vulnerabilities.
Beyond coffee, global prices for cocoa and sugar have declined due to market uncertainties stemming from the tariffs. Top cocoa producers like Ivory Coast and Ghana are facing tariffs of 21% and 10%, respectively, which could lead to decreased demand and financial strain on farmers.
These tariffs not only disrupt established trade relationships but also threaten the economic stability of developing nations that depend on agricultural exports. The potential decline in fair trade practices may result in lower incomes for farmers, increased poverty, and heightened economic inequality. As these countries navigate the challenges posed by the tariffs, the global community must consider the broader implications on international trade and the livelihoods of vulnerable populations.
Paul Rice is the author of the new book "Every Purchase Matters: How Fair Trade Farmers, Companies, and Consumers Are Changing the World."
In the book he reveals the untold story of the fair trade movement and its significance. Rice tells the stories of CEOs, activists, grassroots farmer leaders, and consumer advocates that he has known for over 40 years, working with them to pioneer sustainable, ethical sourcing.
Rice gives voice to the visionaries and practitioners who are making sustainable business the new normal. These protagonists share successes and failures, lessons learned, and their extraordinary impact in communities around the world. Their stories illuminate how sustainability is good not only for people and planet but also for business.
Guest:
Paul Rice is an award-winning social entrepreneur and the founder of Fair Trade USA, the leading certifier of Fair Trade products in North America. Under Rice’s leadership, Fair Trade became one of the fastest growing segments of the food and beverage industries in North America, benefitting over 1 million farmers and workers in 70 countries worldwide.
Rice has been named Ethical Corporation’s 2019 Business Leader of the Year and has been recognized four times as Social Capitalist of the Year by Fast Company magazine. Rice is also a recipient of the prestigious Skoll Award for Social Entrepreneurship, the World Economic Forum’s Social Entrepreneur of the Year, and the Ashoka Fellowship.
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This interview will be recorded on Wednesday, April 9 2025.
