Trump’s Proposed Tariffs on Brazilian Goods Could Impact U.S. Breakfast Prices
SAO PAULO (AP) — President Donald Trump’s recent announcement to potentially increase import taxes by 50% on goods from Brazil has raised concerns about rising breakfast costs in the United States. Key morning staples such as coffee and orange juice may experience significant price hikes if an agreement is not reached by August 1.
In addition to coffee and orange juice, Brazilian beef and regional airlines could also bear the brunt of these proposed tariffs. Brazil’s President Luiz Inácio Lula da Silva responded promptly, asserting that the country would reciprocate if the tariffs are enacted.
Political Underpinnings of the Tariffs
Trump’s tariff threat appears to be politically motivated, targeting an ongoing Brazilian Supreme Court trial involving former President Jair Bolsonaro, a close ally. Bolsonaro faces charges related to attempts to overturn his 2022 election loss. Furthermore, Trump highlighted the U.S. prosecution of social media companies that fail to adhere to Brazilian laws as another factor in his decision to elevate Brazil’s trade tariffs.
The U.S. Census Bureau reports that the United States enjoyed a trade surplus of $6.8 billion with Brazil last year, making the stakes even higher for both nations.
Brazilian Industry Responses
Brazilian exporters and political figures—many of whom support Bolsonaro—have condemned Trump’s move and urged Lula to negotiate. Various associations representing coffee, beef, and orange juice industries are rallying in defense of Brazil’s economic interests.
“These new tariffs impose direct effects on Brazil’s agribusiness, influencing exchange rates, raising the cost of imports, and affecting the competitiveness of Brazilian exports,” stated Brazil’s agribusiness caucus in Congress.
Impact on Coffee and Orange Juice Supply
Lula recently noted that the U.S. had a trade surplus of over $410 billion with Brazil in the past 15 years, with coffee and orange juice being among the few Brazilian products that are heavily consumed in the American market.
Data indicates that Brazil accounts for approximately 30% of coffee consumed in the U.S., with Colombian and Vietnamese producers following behind. With global coffee stocks low due to climate impacts, rising prices are becoming a pressing concern.
Marcos Matos, executive director of the Brazilian Coffee Exporters Council (Cecafé), expressed serious concerns over the proposed 50% tariff increase. He stated, “It will harm us, coffee exporters, in terms of jobs, income, and costs, and it will ultimately lead to higher prices for American consumers.” He indicated that Brazil’s agriculture minister is exploring alternatives to support coffee exporters during negotiations with the U.S.
Ibiapaba Netto, a director at the Brazilian Citrus Juice Exporters Association, echoed these sentiments. He emphasized that the U.S. market relies heavily on Brazil, as about 60% of its orange juice imports come from the country. “These additional tariffs do not strengthen Florida’s orange juice; rather, they weaken the entire industry and raise costs for breakfast across the U.S.,” Netto stated.
Shifting Expectations
Initially, some in Brazil viewed Trump’s tariff announcement in April as a potential opportunity, as the country avoided the harsher penalties inflicted on Canada, Mexico, and China. However, with the new proposed 50% tariffs, Brazil faces one of the highest tariffs marked by the U.S.
Marcos Jank, a professor of global agribusiness at Insper in São Paulo, commented, “We have moved into a losing position.”
Impact on Other Industries
The Brazilian aviation industry, particularly Embraer, another significant exporter, is closely monitoring these developments. The company stated it is evaluating the potential impact on operations and whether the tariffs will specifically affect Brazilian aviation.
“Any material impacts will be addressed during our second-quarter earnings conference call, scheduled for August 5,” Embraer noted, while also exploring discussions with relevant authorities to maintain zero import tax status for the aeronautics sector.
The Beef Sector’s Concerns
Roberto Perosa, president of the Brazilian Association of Meat Exporting Industries, has engaged in ongoing negotiations with U.S. partners since the announcement. He insists that Brazil’s beef industry does not directly compete with U.S. production, having supported American consumers with affordable options during livestock shortages in recent years.
“We don’t want to be caught in political disputes that jeopardize our productive sector,” he implored, stressing that such actions will ultimately lead to higher prices for the American public as well.
Future Implications and Negotiation Prospects
While Trump’s tariffs are recognized as politically fueled, Brazil continues to develop commercial arguments to overcome ideological barriers. Luiz Rua, secretary of trade and international relations at Brazil’s Ministry of Agriculture, indicated there may be negotiating openings with U.S. interest in accessing Brazil’s ethanol market, while Brazil seeks improved access to the U.S. sugar market.
“That’s part of our agricultural negotiations,” Rua elaborated, introducing further discussions about various sectors that could potentially alleviate tensions between the two nations moving forward.
