Insight Focus
Brazilian coffee and juice markets face disruption from new US tariffs. These sectors, heavily reliant on US demand, are among the most affected by the sudden 50% import tax increase. High-value exports like cocoa derivatives and collagen also face mounting challenges.
Agribusiness Fears Impact of Tariffs
With the imminent entry into force of 50% US tariffs on Brazilian imports, several sectors of the economy are already calculating the extent of the losses. In the case of agribusiness, the greatest concern centres on coffee and fruit juices, which are exported to the US on a large scale.
Source: Comex
This Wednesday, July 30, President Donald Trump signed an executive order implementing the new tariffs. The measure is expected to take effect next week. Some products are exempt—at least for now—such as orange juice and petroleum products.
Coffee Producers Postpone Major Negotiations
Coffee, on the other hand, did not escape the 50% tax. Even before the publication of the executive order, that was previously scheduled for August 1, the sector was openly concerned.
Some producers were already opting to sell smaller volumes due to concerns over the new tariff scenario.
The main worry is that the 50% import tariff will significantly reduce coffee shipments to the US— until changes in American import taxes, the product was exempt from tariffs.
The US is Brazil’s main trading partner for coffee exports, with sales reaching around USD 1.9 billion in 2024. Approximately 25% of all coffee imported by the US comes from Brazil—countries such as Colombia and Mexico also supply the US market.
Source: Comex.
In recent weeks, the perception was that negotiations between the Brazilian and US governments had entered a difficult phase. This assessment has motivated the private sector to reach out to US importers in an attempt to build closer ties with the White House.
One of the main objectives was to secure a reduction in tariffs—or even exemptions. However, there has not been much progress in this regard.
Orange Juice Was Also in the Crosshairs
Alarm bells were also ringing for orange juice producers, which ended up, that ended up escaping the new tariffs. Juices made from other fruits, however, were included in the new tariff package.
Regarding orange juice, the US accounts for no less than half of the total revenue generated by exports—the sector feared a significant impact if it were overtaxed.
Source: Comex.
The US import tariff on Brazilian orange juice is USD 415/tonne of concentrated product. The new tariffs could severely complicate Brazilian shipments.
Some organizations, such as the National Confederation of Agriculture, issued reports stating that exporting the product to the US might no longer be viable under the new rates.
Under the threat of new tariffs, the signing of new contracts was even suspended, according to a survey by the Center for Advanced Studies in Applied Economics (Cepea) at the University of São Paulo (USP).
Premium Products Fear Loss of Market
Other agribusiness products, such as cocoa, are also expected to be impacted by the new regulations. In recent years, Brazil has positioned itself as a premium supplier, based on sustainable production.
The sector has invested in higher-value products, such as cocoa nibs, cocoa paste and cocoa butter, with growing sales to the US.
Source: Comex.
The 50% tariffs threaten to significantly impact exports to the US, which has become one of the main markets for cocoa derivatives.
Furthermore, a sudden drop in foreign sales could lead to legal complications. Many cocoa derivative manufacturers operate under a special customs regime—Drawback—which grants tax exemptions for imported inputs such as emulsifiers used in the production of products intended for export.
If exports to the US become unviable, the risk of legal uncertainty surrounding the use of the Drawback regime cannot be ruled out.
“The inability to honor contracts signed under this regime may result in fines and the requirement to pay suspended taxes,” the National Association of Cocoa Processing Industries said in a statement.
Collagen Industry May Also Be Harmed
Other production chains targeting high-value-added niches, such as hydrolysed collagen, are also expected to be impacted by the new tariffs.
The US represents, by far, the largest international market for Brazilian collagen—last year alone, it generated USD 51.3 million in sales to the country.
Source: Comex.
In 2024, Brazilian exports of hydrolysed collagen to the US increased by nearly 16% compared to the previous year. Over the past decade, growth has reached 338%, according to Comex, indicating strong prospects for continued expansion.
Source: Comex.
Now, the sector is considering contingency plans, including analysing new strategic trade partners. In general, agribusiness—like other sectors of the economy—waits in anticipation of how the situation will unfold.
