Starbucks’ stock is being pummeled

Jim Edwards is the executive editor for global news at Fortune. He was previously the editor-in-chief of Business Insider's news division and the founding editor of Business Insider UK. His investigative journalism has changed the law in two U.S. federal districts and two states. The U.S. Supreme Court cited his work on the death penalty in the concurrence to Baze v. Rees, the ruling on whether lethal injection is cruel or unusual. He also won the Neal award for an investigation of bribes and kickbacks on Madison Avenue.

S&P 500 futures are up 0.23% this morning, after the index closed down 0.49% yesterday. The blue-chip ranking has gained 7% year to date and remains near its all-time high, but there is one major name that isn’t benefiting from the risk-on attitude on Wall Street right now: Starbucks.

SBUX is down 1.15% year to date, and is down 8% over the past five trading sessions. It is not difficult to figure out why. President Trump is sitting on the stock. Or rather, his 50% tariff on Brazil—the world’s largest producer of coffee—isn’t investors’ preferred cup of tea.

On its Q2 earnings call, the company reported a 2% decline in same-store sales, even as per customer sales rose 1%. That suggests coffee price increases are already percolating through the company.

Starbucks’ costs could rise 3.5% annually, according to TD Cowen analyst Andrew Charles. That would wipe two cents a share off Starbucks’ earnings, Charles said.

The U.S., of course, grows close to zero coffee. Thus the tariff on Brazil will result solely in price increases for American coffee drinkers.

Counterintuitively, it won’t hurt Brazil that much. Goldman Sachs projects that the Brazilian economy will still grow

The rest of the world is likely to benefit. There are plenty of markets for coffee. If U.S. demand goes down, the extra supply for foreign customers is likely to depress price growth.

That’s already happening. Global arabica coffee futures have declined

That dynamic—that the tariffs are going to hurt global economies less than first thought and may contain advantages for some foreign markets—goes some way to explaining why markets are largely up across Asia and Europe this morning.

Here’s a snapshot of the action prior to the opening bell in New York:

Correction: This post was updated to reflect the fact that coffee prices are sold per pound, not