MW Prices for coffee and orange juice are jumping after Trump hits Brazil with 50% tariff

By Victor Reklaitis

Brazil ETF and the country's currency have also been hit

President Donald Trump's plan to hit Brazil with a 50% import tax on Aug. 1 threatens to increase prices for coffee and orange juice, two of the South American country's key products.

Coffee futures had spiked but recently were trading just 1% higher, as shown in the chart below. An estimated 99% of coffee consumed by Americans is imported, and the U.S. Department of Agriculture figures that around 35% of U.S. unroasted coffee imports come from Brazil.

Orange-juice futures recently were trading up by 6%, as shown in the chart below. The U.S. has become increasingly reliant on imports for OJ due to declining domestic production, according to a University of Florida study. Imports accounted for about 82% of the OJ available to American consumers in 2022-23, and Brazil provided around 73% of those imports, according to Citrus Industry Magazine.

Besides affecting prices for breakfast beverages, Trump's trade action against Brazil has weighed on the country's currency and a key Brazil ETF.

The U.S. dollar $(USDBRL.FOREX)$ was buying about 5.45 real on Wednesday morning, but jumped to around 5.60 on Wednesday afternoon after Trump criticized Brazil and indicated a trade letter was imminent. In trading on Thursday, the dollar had given up some gains and was recently down to around 5.54 real.

The iShares MSCI Brazil ETF EWZ was down 1.6% on Thursday after closing 1.9% lower on Wednesday.

Trump's tariff letter for Brazil hit Wednesday after the U.S. stock market's closing bell. Trump said the high import tax of 50% was due in part to Brazil's treatment of its former president, Jair Bolsonaro, who is facing a trial on coup charges. Trump said Brazil's handling of his ally Bolsonaro is "an international disgrace."

Brazilian President Lula da Silva fired back at Trump in a lengthy social-media post, saying in part that his country is "a sovereign nation with independent institutions and will not accept any form of tutelage." He also suggested the country could retaliate, writing that "any unilateral tariff increases will be addressed in accordance with Brazil's Economic Reciprocity Law."

-Victor Reklaitis

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July 10, 2025 12:43 ET (16:43 GMT)

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