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Tariffs

Brazil's Agricultural Exports Face Uncertainty Amidst Trump's Tariff Threat

Strategic Insights

— 2 min read

As the August 1 deadline approaches for the imposition of a 50 per cent import tax on goods from Brazil, farmers and ranchers are bracing for potential damage to the country's world-leading shipments of orange juice, coffee, and beef. Brazil is the biggest global exporter of orange juice, providing about 70 per cent of the beverage drunk in the US, and the country's agricultural industry is majorly reliant on the US market.

Key Takeaways:

  • The threat of a 50 per cent import tax on Brazilian goods by the US could lead to a significant decline in exports, potentially causing a domestic glut in the US market.
  • Brazilian wholesale prices for orange juice, coffee, and beef have already fallen in July, threatening a double blow to the country's agricultural industry.
  • Trade talks are complicated by the politicized nature of Washington's complaints, with President Donald Trump citing a "witch-hunt" against Brazil's former right-wing president as a reason for the tariff.
  • The 50 per cent duty would result in a more than sixfold rise of an existing duty charged at $415 a tonne on orange juice exports, making them "unviable" by some industry estimates.
  • The US is Brazil's main foreign supplier, accounting for 70% of the country's orange juice exports, with the beverage worth $1.3bn in the annual harvest ended in June.
  • The tariff threat is also rippling out into coffee, with Brazil's shipments to the US worth about $2.2bn over the past year, according to the Office of Economic Complexity.
  • The 50 per cent duty on coffee imports would push up prices across the board and could dent US consumption, as coffee is a vital ingredient in many American roastings.
  • New Jersey-based orange juice importer Johanna Foods is suing the Trump administration over the tariff, arguing that it will cause supermarket price increases of 20 to 25 per cent.
  • Prices for arabica beans, used in higher-end brews and make up the bulk of Brazilian output, had been falling in recent months but then rose after Trump sent his tariff letter.
  • Brazilian beef already faces a 26.4 per cent tariff in the US above a modest import quota, and the additional duty would severely undermine Brazil's ability to compete in the market, said Larissa Alvarez, analyst at commodities brokerage StoneX.
  • The total value of Brazilian beef exports to the US between January and May this year was higher than any other period on record, with a trade deficit in Brazilian beef imports.

Statistics:

  • The value of Brazilian orange juice exports to the US, worth $1.3bn in the annual harvest ended in June.
  • The existing duty charged at $415 a tonne on orange juice exports, which would rise to more than six times its current value with the imposition of a 50 per cent duty.
  • The value of Brazilian coffee shipments to the US, worth about $2.2bn over the past year, according to the Office of Economic Complexity.
  • The price of the juice on New York's Intercontinental Exchange, which has risen 16 per cent since Trump promised the levy against Brazil on July 9.
  • The 20 to 25 per cent supermarket price increase expected with the imposition of the 50 per cent tariff on orange juice imports, according to New Jersey-based orange juice importer Johanna Foods.
  • The 18 per cent increase in Live Cattle Futures on the Chicago Mercantile Exchange in the first half of 2025.

Sources:

  • Cepea research institute at the University of Sao Paulo
  • Office of Economic Complexity
  • Citrus industry association CitrusBR
  • Rabobank
  • Johanna Foods
  • Intercontinental Exchange (ICE-US FCOJ futures)
  • StoneX
  • LSEG
  • FT.com

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