Saturday, July 12, 2025

Coffee Prices Jump After Trump Hits Brazil With 50% Tariff

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Coffee prices soared on Thursday following U.S. President Donald Trump’s decision to impose a 50% tariff on Brazilian imports.

The previous day, Trump imposed a 50% tariff on Brazil, citing concerns over non-tariff trade barriers and the ongoing investigation into former Brazilian President Jair Bolsonaro, once known as the “Trump of the Tropics,” on charges of attempted coup. Brazil swiftly retaliated with a 50% tariff, decrying the U.S. action as interference in its domestic affairs.

As a result, U.S.-listed Brazilian stocks tumbled, and Brazil’s benchmark Bovespa index fell 0.48%. The Brazilian real suffered a significant decline, dropping more than 2%.

As Brazil is the world’s leading producer of Arabica coffee, coffee prices have surged significantly. In New York, the prices of Arabica coffee have jumped over 3.5%.

In contrast, U.S. capital markets remained largely unaffected. The U.S. stock market rallied, seemingly dismissing the escalating U.S.-Brazil trade tensions, as the United States is not expected to suffer significant damage from the conflict.

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