Some of the most popular breakfast beverages could cost more following President Donald Trump’s pledge to place a 50% tariff on all imports from Brazil. Industry analysts warn that the move is likely to lead to a price increase for coffee and orange juice, as well as impact their quality.
That’s if there’s no trade agreement between the U.S. and Brazil before an Aug. 1 deadline.
An already reeling industry
If the tariff is implemented, it would put more pressure on the coffee industry, which is already reeling from droughts in Brazil and Vietnam, two of the largest coffee suppliers to the United States. The drought has led to smaller harvests compared to recent seasons, causing prices to rise.
As a result, people are paying more for coffee at the grocery store. The average price for a cup of coffee in late May was $7.93, up from $5.99 at the same time last year, as reported by the U.S. Bureau of Labor Statistics.
Trump said that tariffs on Brazil are, in part, due to what he described as a “witch hunt” against his political ally, Jair Bolsonaro, the former president of Brazil, who is now facing a trial for an attempted coup.
Most of the coffee Americans drink is imported from South America, Africa and Asia. According to the U.S. Department of Agriculture (USDA), the United States imported 1.6 million metric tons of unroasted and roasted coffee in 2024.
If the new 50% tariffs are implemented, “we’re going to see a reshape in the coffee flow of the world,” Guilherme Morya, a coffee analyst with Rabobank in Brazil, told The New York Times. “Especially Brazil to other regions.”
Ryan Cummings, chief of staff at the Stanford Institute for Economic Policy Research, also warned that coffee may rise by 10%, or a roughly 25-cent increase per cup. However, Cummings added that it will take about three months for consumers to see higher prices.
Starbucks may be able to offset costs
Some chains like Starbucks may be able to alleviate the impact as they rely on coffee from all over the world, including major contributions from Ethiopia and Kenya. They often sign contracts, sometimes years in advance, to help protect them from price fluctuations in the market.
Researchers also acknowledge that coffee quality may decline within the United States because coffee produced in Brazil is of higher quality than beans harvested in Vietnam and other parts of Asia. They also warn that other global suppliers may not have the resources to match Brazil’s mass output.
Ramifications for Brazil
As for Brazil, industry analysts warn that “some exports will probably cease entirely,” David Gantz, an economist at Rice University, told The Times. “Others will continue, but the consumer will end up paying a higher price.”
Coffee requires higher altitudes, tropical temperatures and steady rainfall to grow. In the U.S., that’s only achievable in places like Hawaii and Puerto Rico. However, these regions’ producers say their coffee supply is specialized and isn’t sustainable to meet global demand.
Orange juice could be impacted
New tariffs could also impact fresh and frozen orange juice. USDA figures indicate that Brazil supplies approximately 90% of the United States’ fresh orange juice and 55% of its frozen orange juice imports. The move would also come as Florida, the largest supplier of orange juice in the U.S., has its supply threatened in part by a citrus disease.
Ibiapaba Netto, a director of the Brazilian Association of Citrus Exporters, told the Associated Press that both the U.S. and Brazil’s orange juice supply will feel the negative impacts of a 50% tariff. That’s because Brazil has no substitute for exports to the U.S., which accounts for about 3 billion liters of orange juice annually –– the United States doesn’t have enough of the product domestically.
“About 40% of Brazil’s orange juice exports go to the U.S., but about 60% of U.S. imports of orange juice come from Brazil. We are the biggest partner of American companies that make their breakfast juice,” Netto said. “Except for the few companies producing 100% in Florida, every American brand depends on Brazil’s orange juice for scale.”
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Author: Alex Delia
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