The United States ranks as Brazil’s second-largest trading partner, following China. While the two nations engage in direct competition in certain markets such as corn and cotton, Brazil, recognized as an agricultural powerhouse, also cultivates tropical goods like coffee that are not viable for production in the continental United States.
Brazil has been increasing its beef exports to satisfy the rising demand in the United States and serves as a significant provider of wood pulp, which is essential for a variety of products, including books and toilet paper. This development is generating optimism that certain sectors may be identified or excluded from tariff impositions.
Nonetheless, Brazil’s robust position in commodities provides it with a degree of flexibility, allowing the nation to mitigate the effects by seeking alternative buyers. “It’s likely that these products will have to be redirected,” stated Marcos Fava Neves, a professor at the University of São Paulo’s Ribeirão Preto Business School. “Beef is being exported to many places, orange juice is in short supply and coffee is in short supply.” Brazil’s energy and metal sectors are assessing possible repercussions.
Here’s how the tariffs may influence key commodities:
Coffee
The United States imported nearly $2 billion worth of coffee from Brazil in 2024, as reported by the US Department of Agriculture. According to the Brazilian coffee exporters group Cecafé, the shipments account for approximately 30 percent of US coffee consumption. “It’s a loss to our companies, and it means more costs and more inflation to American consumers,” stated Cecafé Chief Executive Officer Marcos Matos.
Brazil stands as the leading producer of the premium arabica variety, which is preferred by Starbucks and the majority of specialty coffee establishments. The price of the bean has experienced a significant increase over the past year, driven by adverse weather conditions in Brazil that have jeopardized supply levels. Giuseppe Lavazza, chairman of Italian roaster Lavazza, stated on Bloomberg Television that tariffs on Brazil could lead to a significant increase in coffee prices.
Beef
US meatpackers, confronted with the most diminished US cattle herd since the 1950s, have increasingly turned to imports from nations such as Brazil. As consumers utilizing weight-loss medications increasingly pursue high-protein food options, demand is experiencing an upward trajectory. In 2024, approximately US$1.4 billion worth of beef was imported into the United States from Brazil, as reported by the US Department of Agriculture. Brazilian producers are expected to adjust their shipment strategies, as indicated by Minerva SA, which has stated its capability to supply the US market through its operations in Argentina, Paraguay, Uruguay, and Australia. Nonetheless, the Brazilian Association of Meat Exporters highlighted concerns regarding “global supply and food security,” while advocating for increased dialogue between the two nations.
Crude oil
For the first time last year, Brazilian crude exports surpassed all other foreign sales in Latin America’s largest economy, with shipments of oil and derivatives to the US amounting to US$7.6 billion in 2024. Brazil’s oil lobby group IBP articulated that the tariff adjustment “brings uncertainty to the oil and gas sector, which today accounts for 17 percent of Brazil’s industrial GDP and 1.6 million direct and indirect jobs in the country.” However, experts perceive minimal structural risk to the nation’s production, considering Brazil’s capacity to redirect export flows.
“Brazil has the capacity to redirect barrels currently exported to the US to refineries in Asia (China, India), Europe, or the Middle East, which demand light, low-sulfur crude such as those produced in Brazil’s pre-salt fields,” BTG Pactual analysts led by Luiz Carvalho wrote in a note to clients. Analysts perceive a constrained effect on the state-controlled oil producer Petrobras, given that it exports the majority of its crude to China.
Orange juice
Brazil constitutes approximately 70 percent of worldwide orange juice exports and has assumed a more significant position in the US supply chain as a lethal citrus greening disease has proliferated through Florida’s groves. While the same disease is affecting certain regions of Brazil, the northeastern sector of the country remains largely unaffected and is experiencing growth in production. On Thursday, orange juice futures experienced an increase of up to six percent, reaching their highest price in nearly a month. The proposed tariff is set to significantly exceed the current rate of US$415 per ton imposed on Brazilian juice exports, resulting in a fee that represents over 70 percent of the product’s value, according to industry association CitrusBR. Executive Director Ibiapaba Netto stated that this would render shipments “unfeasible.” “Now we have to speed up production to ship the orders we still have as quickly as possible before the taxes come into effect,” stated Bryan Souza, head of global operations at Sumo Brasil, a producer of frozen concentrated orange juice.
Ethanol
Brazil has been increasing its ability to transform corn and sugar cane into ethanol, a biofuel frequently mixed with gasoline. The United States represents a significant market, where incentives in California for low-carbon fuels have contributed to an increase in ethanol shipments, reaching approximately 300 million litres in the previous year. A potential risk of retaliation could restrict shipments to Brazil from the US, thereby constraining supplies within the South American country this year, according to Bruno Lima, soft commodities business director at StoneX.
Pulp and paper
Brazil hosts Suzano, the leading global exporter of pulp utilized in products such as toilet paper. Pulp ranks as Brazil’s fourth-largest agricultural export to the United States, with paper and plywood also featuring prominently among the leading goods, as reported by Brazil’s Ministry of Agriculture and Livestock. Suzano’s Chief Executive Officer, João Alberto de Abreu, indicated in May that the company was transferring the burden of tariffs — which stood at 10 percent at that time — to buyers in the United States. Suzano exhibits the highest sensitivity to tariffs among Brazilian commodity producers, with approximately 15 percent of its revenue derived from the US, as noted by Citi analyst Gabriel Barra.
Sugar
Historically, a significant portion of sugar in the United States has been produced domestically or sourced from Mexico; however, there has been a notable increase in shipments from Brazil, which holds the position as the leading sugar producer globally. In 2024, the United States achieved a historic level of imports from the country, surpassing one million metric tons, as reported by the USDA. The United States imposes restrictions on the volume of sugar imports subject to minimal tariffs, designating approximately 14 percent of this allocation to Brazil for the fiscal year 2025. As of the end of May, additional shipments from Brazil, which incur elevated fees, have reached over 265,000 tons, according to Mike McDougall, an analyst at McDougall Global View.
Steel
According to Marco Polo de Mello Lopes, chief executive officer of industry association Aço Brasil, Brazil’s steel industry perceives no direct consequences from the tariff declared by Trump, as the sector was already operating under that rate due to Section 232 of the Trade Expansion Act. The action, however, could strain the diplomatic ties between Brazil and the US, complicating efforts to resume steel trade discussions that might include export quotas on semi-finished products, Lopes stated. Brazilian steel mills accounted for approximately 60 percent of the total slabs imported by the US in the previous year to support its industrial sector. In São Paulo, the mining and steel sectors experienced an uptick, driven by expectations that increasing commodity prices and minimal exposure to the US market will enable them to navigate the current economic challenges.