Sao Paulo (AP) – President Donald Trump’s threat to increase import taxes by 50% of Brazilian goods can increase the cost of breakfast in the United States. Coffee and orange juice prices – two brackets from the American morning diet – can be strongly influenced if there is no agreement until August 1.
Brazilian beef and regional airlines are also among the products that can be affected by Trump’s decision announced on Wednesday, to which Brazil President Louis Inasio Lula Silva promised to answer on Thursday.
This time of Trump this time is frankly political, focused on the Brazilian Supreme Court process against former President Jeir Bolsonaro, his ally, who was accused of his alleged role in an attempt to cancel the 2022 election. To hike from taxes on Brazil’s imports.
The US Census Bureau said the country had $ 6.8 billion in trade surplus with Brazil last year.
Brazilian exporters, bodies that represent them, and politicians – many of whom are friendly to Bolsonaro – have poured criticism of Trump and called on Lula to negotiate, with coffee, beef and orange juice associations, which are collected in the nation’s defense.
“These new tariffs cause direct effects and hit the agribusiness of Brazil, affecting the currency course, as the price of imported raw materials and the competitiveness of Brazilian exports,” Brazil’s statement said on Thursday.
Spoiled breakfast
Lula said in interviews after Trump’s moving that the United States had a trade surplus with the South American nation of over $ 410 billion in the last 15 years, with orange juice and coffee among the few goods made in Brazil that US consumers receive in a huge number.
The habit of Americans for coffee depends almost exclusively on imports. Official data from the US government show that Brazil, the best coffee maker in the world, supplies about 30% of the US market, followed by Colombia by approximately 20% and Vietnam at about 10%. Global actions are already low due to climate -related pressure, which have recently stressed coffee prices.
Marcos Matos, CEOFE CEO, a Coffee Exportsman Council in Brazil, said the initial 10%tariff imposed by Trump in April is not as catastrophic as some of Brazil’s competitors face even higher percentages. Vietnam, for example, started with a 46% tariff, now reduced to 20%. He sees the proposed increase to 50% as a serious escalation.
“This will harm us, coffee exporters in terms of jobs, income and expenses. And this will hurt the US industry and the end consumer, who will eventually pay more,” Matos told the Associated Press. He added that the Minister of Agriculture Carlos Favaro told him on Thursday that he was looking for alternatives for exporters of coffee while negotiating with the United States
Ibiapaba Neto, director of the Brazilian Citrus Juice Association, said both sides would suffer, as Brazil does not have a market replacement that buys about 3 billion liters of its orange juice every year and the US does not have enough of the product at home.
“About 40% of the exports of orange juice to Brazil go to the United States, but about 60% of us imports of orange juice come from Brazil. We are the largest partner of American companies making their juice for breakfast,” Neto told AP. “With the exception of the few companies that produce 100% in Florida, each American brand depends on Brazil’s orange juice for scale.”
Netto added that American brands can survive without the juice of Brazil, but now it will be much more difficult for them to make their wheels return without it. “
“They have nowhere else to find our product. The American market is a traditional partner, we always complement ourselves. These additional tariffs for Brazil do not strengthen orange juice from Florida, they make the entire juices industry brighter and the breakfast costs of everyone in the United States,” Neto said.
Both Matos and Neto say that their producers want the Lula of Brazil to maintain the table diplomacy to the very end of the negotiations before imposing the country’s reciprocity law.
Incredible benefit, then a bitter blow
When Trump first revealed his tariff plan in April, many in Brazil hoped the country could benefit as it avoids the most ranked penalties imposed on Canada, Mexico and China.
“We were abandoned, so many people said that Brazil would eventually take advantage of it,” says Marcos Jank, a professor of global agribusiness at Insper, a Sao Paulo Business School. “But with this increase in the 50%tariffs, we are now confronted with one of the highest tariffs the United States is applying. We have moved to a losing position.”
The manufacturer of Embraer airlines, another Brazilian company that will be affected if the new tariffs are applied, said in a statement that “is currently evaluating potential impacts on its operations” and whether “the new measure will specifically affect the Brazilian aviation industry.” Investment Manager Analysts XP Evaluation 60% of Embraer Revenue Depends on the United States
“Any significant impacts will be considered during the conversation of our second quarter revenue conference scheduled for August 5,” said Embraer a statement. In addition, Embraer is actively committed to the relevant authorities that seek to recover the zero tax on the aeronautical sector. “
The beef sector in Brazil is also in a difficult position after Trump’s announcement.
Roberto Perosa, President of the Brazilian Meat Industry Association, said he was meeting with partners in the United States from Wednesday, leading negotiations with the Trump administration.
Perosa said Brazil’s beef industry is not a competitor to the United States, as in recent years the South America nation has offered a high volume of production during an animal shortage cycle, which has helped US consumers buy more cheap products.
“We do not want to continue to be the purpose of political disputes that harm the Brazilian productive sector,” he said. “The restrictions of political actions cannot come at the expense of the population of our country – or the US population, which will pay the price through higher beef prices.”
While Trump’s tariffs are regarded as politically motivated, Brazil works to develop commercial arguments to violate ideological impasse.
Louis Rua, secretary of trade and international relations at the Ministry of Agriculture of Brazil, said there may be room to negotiate tariffs, citing US interest in access to the ethanol market in the country. Brazil, for its part, insists on better access to the US sugar market.
“This is part of our agricultural negotiations,” Rua said. “There are other discussions outside my portfolio that include industrial issues. All this is placed on the table.”
