Quick overview

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Markets warned US consumers would have to pay much more for basic foods like coffee and orange juice if the Trump administration follows through on its plan to impose 50 percent tariffs on all imports from Brazil. According to US Census Bureau data, the US has a $7.4 billion trade surplus with Brazil.

President Donald Trump announced new tariffs on Wednesday that would increase the duty on Brazilian imports from 10% to 50% starting on August 1. Brazil is the world’s largest producer of orange juice, which accounts for 80% of global exports, and produces almost half of the world’s arabica coffee, according to industry data.

Although it is the world’s largest producer of sugar, it does not export large amounts to the US. “A 50% increase in 312,000 tons of sugar from Brazil shouldn’t have a big effect, as the US consumes 11.185 million tons of sugar annually.” Coffee and orange juice will be more affected. According to a Grand View Research report, Brazil is the world’s largest producer of acai, and the vast majority of US imports come from this country.

Commerce Secretary Howard Lutnick stated that certain natural resources not available in the U.S. are exempt from tariffs based on agreements with the nations that produce and export them. “With the 50% tariff, I don’t believe selling Brazilian coffee to the US would be financially viable.”

The Brazilian leader of a significant international commodities trader stated, “We’ll see how this develops, but it would be very complicated.”.