SAO PAULO (AP) — President Trump’s warning to raise import taxes by 50% on Brazilian goods could lead to higher breakfast prices in the U.S. Coffee and orange juice, essential morning staples, are likely to be hit hard if no agreement is reached by August 1. Other affected products include Brazilian beef and regional airline services, according to recent developments.
This tariff threat appears to have a political motive, particularly aimed at Brazil’s Supreme Court trial involving former president Jair Bolsonaro. Bolsonaro faces charges related to his attempt to overturn his 2022 election loss. Trump’s letter highlighted the prosecution of U.S.-based social media companies for not complying with local laws as a reason for the potential tariffs.
Last year, the U.S. had a trade surplus of $6.8 billion with Brazil. However, Brazilian exporters and political figures, many supportive of Bolsonaro, have criticized Trump’s move and are calling for negotiations. Industries tied to coffee, beef, and orange juice are particularly vocal. Brazil’s agribusiness caucus stated that increased tariffs would jeopardize their competitiveness and hurt exports.
Brazil is a crucial supplier for American coffee consumption, providing about 30% of the market. Colombia and Vietnam follow with shares of roughly 20% and 10%, respectively. Current global coffee stocks are low, primarily due to climate impacts that have strained supply and pushed up prices.
Marcos Matos from Brazil’s coffee exporters council noted that the initial 10% tariff was manageable, as other countries faced much steeper rates. But the proposed 50% increase is alarming. He argued that while it would harm Brazilian exporters, it would also hurt American consumers as prices rise.
In the citrus sector, Ibiapaba Netto from the orange juice exporters’ association pointed out that the U.S. imports about 60% of its orange juice from Brazil. If tariffs are imposed, American companies will struggle to source this essential product, which could disrupt their operations.
Initially, when Trump announced tariffs, some in Brazil believed the country might benefit due to being somewhat sheltered from prior penalties aimed at Canada, Mexico, and China. However, this recent increase places Brazil in a tough position, according to agribusiness expert Marcos Jank.
In addition to agricultural products, Brazilian airline manufacturer Embraer is also evaluating the impact of these tariffs. Analysts estimate that around 60% of Embraer’s revenue comes from the U.S. market, raising concerns about the future of its operations.
The beef industry, which has offered significant supplies during shortages in the U.S., is worried about ongoing political disputes affecting trade. Roberto Perosa from the Brazilian meat exporting association emphasized that these tensions shouldn’t come at the expense of consumers in either country.
As Brazil seeks ways to negotiate, there may be opportunities for trade discussions, especially regarding the U.S. interest in Brazilian ethanol. Luiz Rua, a trade official, mentioned balancing interests in the sugar and ethanol markets as part of their strategy.
In summary, while the proposed tariffs may seem like a political maneuver, the consequences could ripple through both Brazilian and American economies, impacting everything from coffee prices to airline operations. The interconnectedness of these markets suggests that a resolution might benefit both nations.
Source link
Jair Bolsonaro, Donald Trump, Brazil, Luiz Incio Lula da Silva, International trade, Sao Paulo, Taxes, Florida, General news, International News, Latin America, Tariffs and global trade, South America, World news, Luiz Rua, Aerospace and defense industry, United States government, Brazil government, Roberto Perosa, Politics, Carlos Fvaro, Marcos Matos, Business, Marcos Jank, World News
