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MILAN – The executive order signed by U.S. President Donald Trump yesterday, Wednesday, July 30, implements an additional 40% tariff on Brazilian products, bringing the total trade duties to 50%. Trump had threatened Latin America’s largest economy with the move as punishment for what he has termed a “witch hunt” against his ally and friend, former president Jair Bolsonaro.
The new tariffs will come into effect on 6 August. A long list of exceptions has been provided, sparing many of the South American country’s major exports to Washington.
However, coffee is not among these, meaning the full 50% rate will apply to this commodity.
The decision is bound to have serious repercussions for the U.S. coffee industry and for the global trade. According to the Brazilian Coffee Industry Association (Abic), all is not yet lost and there is still a negotiating window to include coffee among the exempt commodities between now and the aforementioned date of August 6.
The Brazilian Specialty Coffee Association (BSCA) has also expressed concern over the trade measures announced by President Trump.
The United States is the top import market for Brazilian specialty coffees, with an annual volume of around 2 million bags worth over $550 million.
If confirmed, the measure will impact the specialty coffee community and the high-quality coffee segment worldwide.
The new duties are even more concerning because they affect key sectors of the Brazilian economy, such as industry and agriculture. In large states such as São Paulo and Minas Gerais, exports to the U.S. account for 20% of the total, whereas in some regions of the north-east, this figure is as high as 40%.
The cold shower of 50% tariffs came yesterday after the coffee futures markets close. Indeed, there had been some optimism during the day regarding the possibility of an exemption for Brazilian coffee, after the (partially) reassuring statements made the previous day by U.S. Commerce Secretary Howard Lutnick, in an interview with CNBC.
In New York, the main contract for September delivery closed down 1%, at
