I get why oil would fall - recession, less tourism and trade. But why are tariffs making coffee cheaper? I would have thought it would get more expensive in the US, since it's almost all imported.
Coffee will get more expensive in the United States which is great for Puerto Rico -- although the kids in San Juan would prefer a protectionist strategy of growing crops that they consume themselves than exporting to the mainland.
Because the price of imported goods will increase in the United States driving down demand within the United States, exporters will have more supply which will drive down price to the other 100+ countries they trade with.
Once countries like Thailand and Peru start to trade more amongst themselves there probably isn't a return to same trading with the United States who will be like the kid on the playground nobody wants to play with.
Low demand in the US, means less sales to US, so they may try to make up for the loss of profit on the US market by increasing prices on other markets... So global price increase.
E.g. Apple likely to increase prices on iPhones world wide to make up for the loss in US.
This feels completely unpredictable.
This is not how supply and demand works in a competitive market. If demand drops, supplier compete on price and it leads to a reduction in price. They don't up the price to try to "make up", they can't, because someone next door will accept the lower price to get rid of their supply.
I'm reading it as: US prices go up. US consumption goes down. Less global demand for same global supply. Result: global price goes down.
Where are we disagreeing?
More likely, another force is the expectation that the world economy will contract decreasing the demand for everything everywhere driving down the price despite the taxes increasing the price for United States consumers.
In other words: It doesn't work like that. They might want to try to make up for the loss, but they have to compete with other manufacturers, some of whom will be desperate to make up the sales at lower prices.
The US does import some low quality cheaper crudes (heavy, sour) to be processed by US refineries that have much higher complexity and capital investment than other regions. Effectively people send their OIL to the US to be refined and that is where most of our imports come from.
Prices including tariffs might well go up but that's not what the article is about.
Since prices for consumers go up due to tariffs, demand goes down, hence prices ex-tariff go down. Standard stuff with tariffs, they make things cheaper on the outside.
Producers will lower prices if they fear that consumers will stop buying completely.
It is a widespread addiction, tho. I would bet on more home brew and less Starbucks
Interesting effects for the rest of us with the cheap oil, though. I doubt it will offset the effects of reduced exports to the US but it usually has a positive effect on the economy.
And a terrible effect on the environment. But that's not what anybody is worried about right now.
Lower prices might be good for countries like Germany to stockpile for Winter (so oil & gas they'd already use anyways) while hurting producers that rely on it being a high price to be profitable.
Less profitable may lead to less investment in oil development while wind, solar, and other means become more prevalent.
Ends up making things cheaper globally but more expensive in the US.
From day 1 OPEC has been a loose association off frenemies that occasionally manage to work together for a while when enough of them are sufficiently hurting/greedy at the same time. They break due to producer rivalries every few years.
Oil in the ground is marginally more valuable than pie in the sky. There is nearly unlimited oil in the ground, but you have to find it, extract it, and show a profit after you subtract your expenses. Each step is harder than the last. Saudi oil is like $10 a barrel to produce. You can practically dig it up with a shovel. And it's high quality...a benchmark grade that a lot of the world's refineries are set up for. Much of Venezuelas oil is deep underwater and/or garbage quality. Think huge expensive deep water oil rigs and pumping high pressure kerosene into the ground to loosen up the tar/oil sands enough to get a nasty chunky sandy sludge out of the ground that a lot of refineries can't even process. And it doesn't help that they're under sanctions and don't domestically produce a lot of the equipment they need to extract their oil. And rampant corruption. Venezuela's massive reserves have equally massive challenges turning into profitable oil production.
However, Venezuela's oil is a good bit harder to refine than Saudi oil which is just about the simplest oil to refine. The US controls most of the good refineries (and related technologies) to effectively refine Venezuela's oil, but the US doesn't tend to trade much with Venezuela (lots of history to read there).
So yes, Venezuela has a lot of oil, but it is oil most of the world's refineries don't want to/can't deal with.
As a note, this is also a part of the reason why even though the US is a net exporter of oil we still import a ton of oil. We've got good refineries for processing the cheap difficult to handle stuff most of the world doesn't want to touch (largely because we built it designed to handle Venezuela's oil) and we export stuff that's the "fancy" stuff easy to refine pretty much everywhere.
There's a lot of nuance I'm glazing over there. Read up more about the history of US-Venezuela oil trade, it is quite a history.