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📍 Washington, D.C. — July 12, 2025
The Trump administration’s proposed 50% tariff on Brazilian imports, set to take effect August 1, is expected to spark a sharp rally in U.S. coffee prices, with futures already trading at $2.84 per contract. Brazil, the world’s largest coffee producer, supplies approximately 35% of U.S. coffee imports, making the commodity highly vulnerable to trade disruptions.
📈 Market Reaction and Price Outlook Coffee futures rose 1.8% on Thursday following the tariff announcement, reversing recent declines and signaling potential inflationary pressure across the supply chain. Analysts warn that wholesale prices could climb 40% or more, with consumer costs rising by up to $162 annually per household, according to Reflexivity AI.
🛑 Industry Concerns Brazilian exporters say the tariff would be “devastating” for both sides.
“It will harm us in terms of jobs, income, and costs. And it will hurt the American industry and the end consumer,” said Marcos Matos, Executive Director of Cecafé.
U.S. coffee companies—including J.M. Smucker, Keurig Dr Pepper, and Starbucks—are bracing for higher input costs. While some may seek alternative suppliers like Colombia or Vietnam, global stocks remain tight due to climate-related pressures.
🌍 Political and Economic Context The tariff is part of a broader trade strategy targeting countries with perceived unfair practices. Despite a $7.4 billion U.S. trade surplus with Brazil, the move is widely seen as politically motivated, linked to Brazil’s prosecution of former President Jair Bolsonaro, a Trump ally.
Brazilian officials have promised retaliatory measures, and negotiations are ongoing to avoid escalation. The U.S. Department of Agriculture is reportedly considering exemptions for commodities like coffee that cannot be domestically produced at scale.
