Associated Press reporting by Eléonore Hughes, Paul Wiseman and Lindsay Whitehurst
Local reporting by Tim Hundt
Nov. 16, 2025
VIROQUA, Wis. — Following a White House decision to repeal tariffs on imported coffee, beef, and tropical fruit, a Viroqua based coffee roaster is celebrating a “win” while simultaneously grappling with the long-term financial damages already inflicted by the policy, which he had warned against since its announcement.
The widespread tariffs on imported goods from countries around the world were instituted by the Trump administration. The repeal of tariffs on beef, coffee, and tropical fruit was announced as part of a push by the administration to lower grocery store prices. President Donald Trump scrapped the levies announced in April, calling the day “Liberation Day” in hopes of encouraging domestic production and lifting the U.S. economy, as reported by Eléonore Hughes for the Associated Press. Democrats quickly characterized Friday’s move as an acknowledgment that Trump’s policies were harming American consumers. Tariffs specifically impacting the coffee industry, ranging from 10 percent up to 28 percent on certain countries like Nicaragua, began to take effect in April.
Wonderstate Coffee was founded in 2005, the company was formerly known as Kickapoo Coffee until 2020. Wonderstate roasts approximately 450,000 pounds of coffee annually and employs 90 team members across its roasting facility and cafés in Bayfield, Madison, and Viroqua. The companies headquarters and roasting operations are housed within the Food Enterprise Center. In 2025, the business was honored as the Macro Roaster of the Year by Roast magazine, making it the first company to win the award in both the micro (2010) and macro categories. Ninety-eight percent of the coffees the company purchases are sourced from certified organic farms.
TJ Semanchin, a co-owner of the company, said the end of the tariffs is a relief, but his business has already paid a heavy price.
Semanchin was a vocal critic of the policy earlier this year. He spoke at a legislative roundtable in Richland Center, Wis. after the tariffs were announced and stated the tariffs were forcing him to raise prices. He had warned that tariffs on coffee were “out of touch with the realities of the coffee industry” because the U.S. does not produce coffee domestically at scale, ultimately placing a significant burden solely on local companies and consumers. Semanchin previously stated that the United States does not have a significant domestic coffee production to bring back home, requiring global partners in the industry.
In an effort to raise awareness about the issue, Semanchin traveled to Washington, D.C. in April and attended a press conference with Senator Schumer, advocating for the repeal of the tax. During this trip, he stood alongside other small business owners, including Beth Beneke, the owner of a veteran woman-owned company in Minnesota, who was “very, very, very close to going under,” due to the costs. Semanchin affirmed that advocacy groups, including the coffee caucus and trade groups, applied “relentless” pressure to secure the repeal.
Now that the repeal has been announced, Semanchin provided extensive detail about the clarity of the executive order, unlike previous ambiguous hints.
“I actually read the whole executive order, and then I read the list of items that have been exempted,” said Semanchin. “And it’s very explicit, and because they’ve been hinting at this my fear was that they’re going to go piecemeal. They were going to lower some of the higher tariffs for countries that are coffee producing, like Brazil, that’s been at 50%. That they were just going to do these adjustments. But this is very explicit in the executive order. It gives a very explicit timeline, effective midnight on the 13th. It’s not country specific, product specific, so it means it’s across the board”.
For Wonderstate Coffee, the tariffs, which ranged from 10 percent to potentially 28 percent on certain countries like Nicaragua, arrived alongside historically high coffee commodity prices.
When asked what his approach was to dealing with the tariffs, and whether Wonderstate Coffee raised prices, Semanchin explained the compounding challenges.
“Yeah, we did raise prices,” said Semanchin. “And so we had a price increase earlier this year, and it’s a one two punch in the coffee world, and that we have been working with historic eyes in the coffee market”.
Semanchin further detailed the multiple financial pressures the business faced.
“So we’ve had a one two punch that that’s been part of the reality,” said Semanchin. “There’s a lot of factors built into it, largely on some short term weather, but the long-term is that it’s just been harder to grow coffee. Lrgely because of climate change and access to labor, or just increased costs as well in general. But that’s one side of what we’re dealing with in the last 12 plus months. And then the tariffs. I guess there’s three layers to this. And then the tariffs are a multiplier, right? So, if you’re applying a tariff to a high price product, a tariff is higher because it’s a percentage of the cost”.
Accroding to reporting from Eléonore Hughes with the Associated Press, Brazil was initially hit with a 10% tariff in April. In July, an additional 40% tariff was imposed, with Trump citing reasons including the trial of his ally, former President Jair Bolsonaro. This resulted in a total tariff of 50%. Brazilian Vice President Geraldo Alckmin confirmed that even after the overall repeal, Brazilian goods like coffee, beef, and tropical fruits would still be subject to a 40% tariff, noting that although some products like orange juice would now have a zero tariff, the extra tariff on others remains high.
“So the tariff was going on to an already high priced product,” said Semanchin. “And then the tariffs, especially the tariffs on Brazil, Vietnam and Indonesia, Brazil specifically, have created further chaos in the commodity market, pushing that already high price even higher”.
Semanchin continued his assessment of the effects on coffee markets.
“I don’t know if that was the intention with his 50% blanket on Brazil,” said Semanchin. “That’s the largest supplier of coffee the United States, Brazil, and so that definitely displaced their purchases … they’ll still end up buying all that coffee from Brazil. Brazil was finding buyers too, so they weren’t selling it to the US, but they sold it to Europe. So, even if there was a squeeze on where the highest tariffs were, I don’t think it had much impact in those countries. It just really disrupted the supply chain for us, coffee roasters, and added major headaches and costs.”
Despite raising prices, Wonderstate still absorbed significant unexpected costs. When asked how much the tariff had cost the business, Semanchin said:
“We’ve been eating the tariff costs because, again, our price increase was scheduled because of the coffee costs,” said Semanchin. “We’ve been eating the tariff costs because we had some inventory. But now, that’s all run out. So, all of our inventory now has added tariff applied to it. We’ve spent upwards of $100,000 so far this year, just a brutal number for us as a small business to eat”.
To add insult to injury, Semanchin said that he had to use a line of credit to pay that additional $100,000, and pay interest on it, and ultimately pass that cost to the consumers.
In addition, the unexpected costs led to immediate restraints on business growth and investments, impacting local supply chains. When prompted about whether the company had pulled back on investments or hiring due to the tariffs, Semanchin confirmed the chilling effect:
“We have pulled back on some equipment purchases this year to upgrade our packing line, which the main, you know, one of the main manufacturers for that equipment is actually here in Wisconsin, right,” said Semanchin. “So this is the cascading effect that, as we’ve pulled back on investment, that’s impact that’s actually impacting local manufacturers, right, folks that would be supplying us with with equipment, specifically packaging equipment. So we deliberately, we planned on buying that, and we put that off. We’re not even considering it now for 2026, we’ve delayed that at least a year, if not a year and a half”.
Semanchin said the financial burden extended to staff compensation and profit sharing.
“The combination all those things, yep, we’ve had to be more frugal,” said Semanchin. “With compensation increases, we have a profit share program. Our profit has been greatly impacted. We’re way below what we projected for profit this year. That’s less than of a pool for us to share with our staff. And again, in that environment, we’re just not looking to make big investments, which is definitely hindering our growth potential right now”.
When directly asked if any good resulted from the tariff policy, Semanchin was unequivocal.
“No, nothing,” said Semanchin. “It’s disrupted our supply chains. No, extremely disruptive, and a lot of our money was then going to pay this tax that was unexpected. So you know, as a business, to have an unexpected six digit tax out of nowhere has been super disruptive”.
Semacnhin said it never made sense to him to impose a tariff on a product that cannot be produced domestically.
“Why would we tariff products that we can’t even grow in the US,” said Semanchin. “But what good could come of that? That’s just taxing us and taxing US consumers. Those exporting countries haven’t paid a penny of this, and they haven’t been too impacted by it at all. We’ve still bought the coffee. It’s just made it more expensive for us”.
While the lifting of the tariffs prevents an anticipated January price increase, Semanchin noted that current retail prices will likely remain high due to the costs already incurred on inventory and the still-high market reality. When asked if consumers could expect prices to be lowered following the repeal, Semanchin emphasized the lasting effect of the payments already made.
“Likely not,” said Semanchin. “We’re not going to lower them, because we’re still in this high market reality, and all of our inventory has already been tariffed. So unless we get refunded on that, we already have very expensive coffee that we’re, you know, that that’s, that’s what we have”.
Looking forward, Semanchin noted that the financial battle isn’t over. Wonderstate Coffee, which had to borrow money and pay interest just to cover the unexpected tax, is focusing on efforts to recover those funds.
When asked about the next step for businesses that incurred these costs, Semanchin pointed to a potential Supreme Court case challenging the president’s authority to impose such tariffs:
The Supreme Court case centers on small businesses suing to challenge President Trump’s authority to impose tariffs under the 1977 International Emergency Economic Powers Act (IEEPA). The challenge argues that Congress had carefully limited the ways the president could use tariff authority and that he didn’t possess the boundless authority he claimed under the IEEPA. During oral arguments, the justices sounded skeptical of Trump’s sweeping claims. President Trump had warned that if the Supreme Court strikes down his worldwide import taxes, the United States will be rendered “defenseless’’ and possibly “reduced to almost Third World status”, according to reporting by Paul Wiseman of the Associated Press.
“I think step one is just proving that he never had this authority, right?” said Semanchin. “So even outside of that, just for anyone, think about it like all of a sudden you just got a tax bill that you was not part of your budget. You’ve never paid it before. You’ve never thought about paying it. These tariffs have never, ever been a consideration for me in my 25 years in the coffee business. That word never, has never been uttered before in terms of importing our product”.
Semanchin said there could be legal grounds for their industry to make a case that the should be compensated for the losses incurred that had no positive impact. Semanchin stressed that this news is great, but clarified that they “just solved the major problem that they caused, right?”.
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