LONDON/NEW YORK —U.S. shoppers face sharp value rises on meals staples like espresso and orange juice if the Trump administration sticks to its plan to slap 50% tariffs on all imports from Brazil, merchants and specialists mentioned on Thursday.
They mentioned the proposed import responsibility would halt the movement of Brazilian espresso to the US, its largest purchaser, as neither U.S. roasters nor Brazilian exporters would be capable to bridge the worth hole ensuing from the tariff.
U.S. President Donald Trump launched the brand new tariff on Wednesday, elevating responsibility on Brazilian imports to 50% from 10%, efficient August 1, regardless of the U.S. having a $7.4 billion commerce surplus with Brazil, based on U.S. Census Bureau knowledge.
Round a 3rd of the espresso consumed within the U.S., the world’s largest drinker of the beverage, comes from Brazil, which shipped 8.14 million 60-kg luggage to the US in 2024, greater than 30% greater than in 2023, based on Brazil exporter group Cecafe.
“A tariff of this measurement would all however shut down that movement. Brazilian exporters gained’t take up it. U.S. roasters can’t,” mentioned senior espresso dealer and guide Michael Nuggent, proprietor of California-based MJ Nuggent & Co.
“Backside line: Brazil will promote its espresso elsewhere. The U.S. will purchase espresso from another person – Colombia, Honduras, Peru, Vietnam – however not at Brazil’s quantity or value,” he mentioned.
“I do not assume it might be economically possible to promote Brazilian espresso to the U.S. with the 50% tariff. Let’s have a look at how this may evolve, however it might be very sophisticated,” mentioned the Brazil head of a serious international commodities dealer, with out eager to be named.
Eyes on Europe
Paulo Armelin, a big espresso producer that sells on to U.S. roasters, mentioned his shoppers wouldn’t be capable to pay up if the tariff is utilized.
He mentioned negotiations for 2025 shipments have been already tough as a result of 70% espresso value spike final yr.
“We must search for different markets, possibly Germany.”
Greater than half of the orange juice offered within the U.S. comes from Brazil, in the meantime, whereas the South American nation additionally sells sugar, wooden merchandise, oil and oil merchandise.
U.S. Commerce Secretary Howard Lutnick mentioned final month throughout a Congress listening to that some pure assets that aren’t accessible within the U.S., resembling tropical fruits and spices, could possibly be exempt from tariffs, relying on negotiations with the international locations producing and exporting them.
The U.S. produces solely a fraction of the espresso it makes use of, with farms in Hawaii and some in California, whereas it has develop into extra dependant on orange juice imports lately because of a pointy decline in home manufacturing as a result of ‘citrus greening’ crop illness, hurricanes and spells of freezing temperatures.
A report issued by the U.S. Division of Agriculture earlier this yr forecast the U.S. orange harvest would hit an 88-year low within the 2024/25 season whereas manufacturing of orange juice would droop to a document low.
Beef, ethanol
Brazil additionally exports a modest quantity beef to the U.S. and the tariff has been welcomed by U.S. cattle producers.
“We absolutely help this tariff on Brazil. Brazil’s exports (have) contributed to the shrinking of our U.S. cattle trade. We have to rebuild and cut back our nation’s dependency on imported meals. This can be a step in the proper path,” mentioned R-CALF USA.
When it comes to vitality, Brazil is the world’s second largest producer of the cane or corn-based biofuel ethanol.
The South American nation produced some 35 billion litres of ethanol in 2024, however exported lower than 6%, of which just some 300 million litres went to US, based on a report from BTG Pactual.
In a letter to Brazilian President Luiz Inacio Lula da Silva setting out his tariff plan, Trump criticised what he noticed as Brazil’s assaults on free elections, social media platforms and digital commerce actions of U.S. firms.—Reuters