Starbucks (NASDAQ: SBUX) shares plunged 11.76% in intraday trading on Thursday, as investors reacted strongly to concerns over potential expanded tariffs that could significantly erode the coffee giant's profit margins. The sharp decline comes amid a broader sell-off in restaurant stocks, with Starbucks experiencing one of the most severe drops in the sector.

The plummet was triggered by President Trump's announcement of "reciprocal tariffs" on all US imports, set at a rate of 10% or more. As a major coffee importer with an extensive global supply chain, Starbucks is particularly vulnerable to these trade tensions. Analysts at Baird highlighted that without effective workarounds, Starbucks might face steeper challenges compared to some of its peers in the restaurant industry due to its heavy reliance on imported coffee beans and other ingredients.

The National Restaurant Association warned that the potential new tariffs could lead to higher food and packaging costs across the industry, potentially forcing restaurants like Starbucks to raise prices to maintain profitability. The association emphasized the difficulty in sourcing all necessary ingredients domestically, stating, "It's simply not possible for U.S. farmers and ranchers to produce the volumes needed to support consumer demand." As the situation unfolds, investors will be closely watching how Starbucks navigates these potential trade hurdles and manages its global supply chain in the coming months.