By Gabriela SáPessoa and Mauricio Savarese
Sao Paulo (AP) – President Donald Trump’s threat to raise import taxes by 50% on Brazilian goods can raise breakfast costs in the US. Without an agreement by August 1st, the prices of coffee and orange juice – two staples of the American Morning Diet – could be seriously affected.
Brazilian beef and regional passenger planes are one of the products that could be affected by Trump’s decision announced Wednesday, with Brazilian President Luis Inacio Lula da Silva pledging to fly back and forth on Thursday.
Trump’s move is overtly political and targets the Brazilian Supreme Court trial of former President Jea Bolsonaro, his allies charged with his alleged role in overturning the losses of the 2022 election. The court’s prosecution against a US-based social media company’s failure to comply with local laws was also mentioned in a public letter from Trump as a reason to hike Brazil’s trade tariffs.
The US Census Bureau said last year it had a trade surplus of $6.8 billion with Brazil.
Brazilian exporters, organizations representing them and politicians (many of them friendly to Bolsonaro) have been pouring criticism on Trump, urging Lula to negotiate, and associations of coffee, beef and orange juice have gathered to defend the nation.
“These new tariffs create a direct impact, collide with Brazilian agribusiness, affecting exchange rates, in rising costs of imported input and in the competitiveness of Brazil’s exports,” the Brazilian Agribusiness Caucus in Parliament said on Thursday.
A spoiled breakfast
In an interview after Trump’s move, Lula said the US had a trade surplus of over $400 billion with the South American country in the past 15 years.
American coffee habits rely on imports almost exclusively. Official US government data shows that Brazil, the world’s top coffee producer, supplies around 30% of the US market, with Colombia supplying around 20% and Vietnam supplying around 10%. Global stocks are currently low due to climate-related pressures that have recently strained coffee prices.
Marcosmatos, executive director of Secafe, Brazil’s coffee export committee, said the first 10% tariffs imposed by Trump in April was not as devastating as some of Brazilian competitors face even higher rates. For example, Vietnam started with a tariff of 46% and now has dropped to 20%. He sees the proposed increase as a serious escalation to 50%.
“It will harm us, coffee exporters in terms of jobs, income and costs. And it will hurt American industry and the end consumers. He added that Agriculture Minister Carlos Favaro said on Thursday he was looking for a replacement for coffee exporters when he negotiates with the US.
Ibia Pavanet, director of Brazil’s Citrus Juice Exporters Association, said that both countries suffer as Brazil has not been replaced by a market where they buy around 3 billion litres of orange juice each year, and that the US does not have enough products in their homes.
“Around 40% of Brazilian orange juice exports go to the US, while around 60% of US orange juice imports come from Brazil. We are the biggest partners of American companies that make breakfast juice,” Netto told the AP. “All American brands rely on the size of Brazilian orange juice, except for a few companies that produce 100% in Florida.”
Netto added that American brands can survive without Brazilian juice, but now “it will be much more difficult for them to spin their business without it.”
“They are nowhere else to find our products. The American market is a traditional partner and we always perfect each other. These additional tariffs in Brazil do not enhance the orange juice from Florida.
Both Matos and Net say that their producers hope that Brazilian Lula will maintain diplomacy at the table until the end of negotiations before imposes the state’s reciprocity law.
Impossible profits and bitter blows
When Trump first announced his tariff plans in April, many in Brazil hoped the country could benefit as they avoided the harshest penalties imposed on Canada, Mexico and China.
“We’ve come to terms with the global agribusiness program at Insper, a business school in Sao Paulo,” said Marcos Jank, professor of global agribusiness at Insper, a business school in Sao Paulo. “But with this 50% tariff hike, we are now facing one of the best tariffs the US is applying for. We’ve moved into a losing position.”
Embraer, a manufacturer of airlines, another Brazilian company that will be affected if new tariffs apply, said in a statement that “we are currently assessing the potential impact on its operations,” and that “whether the new measures will have a particular impact on Brazil’s aviation industry.” Investment Manager Analyst XP estimates that 60% of Embraer’s revenues are dependent on the US
“The impact of the materials will be addressed during the second quarter revenue conference scheduled for August 5th,” Embraer said in a statement. In addition to this, Embraer is actively involved with relevant authorities seeking to recover zero import tax in the aviation sector. ”
Brazil’s beef sector remains in the dire straits after Trump’s announcement.
Roberto Perrosa, chairman of Brazil’s Meat Export Industry Association, said he has met with his US partners since manipulating negotiations with the Trump administration on Wednesday.
Perosa said the Brazilian beef industry is not a US competitor as it helps American consumers buy cheaper products as South American countries provide high production during the livestock shortage cycle in recent years.
“We don’t want to continue to be targets of political conflicts that harm Brazil’s production sector,” he said. “The limitations of political action cannot be at the expense of our country’s population, or the population of America.
Trump’s tariffs are considered politically motivated, but Brazil is working to develop commercial debates to break the ideological impasse.
Luis Lua, secretary to trade and international relations at the Brazilian Ministry of Agriculture, said there may be room for negotiating tariffs, citing the US interest in access to the country’s ethanol market. Brazil is looking for better access to the US sugar market.
“It’s part of our farm negotiations,” Rua said. “Besides my portfolio, there are other discussions that involve industrial issues. All of these are on the table.”
Original issue: July 11, 2025, 1:36pm EDT
