The 50% tariffs against Brazilian imports took effect Wednesday, July 30th, two days ahead of when they were originally announced to begin. America is Brazil’s largest coffee trading partner, importing $1.9 billion worth last year, roughly a third of all the coffee imported in the States. Prior to the tariff, experts predicted it would cause a global shakeup in the coffee trade; America would start looking to buy elsewhere, leaving Brazil to seek out new buyers.
Which they now have. China is now making big steps to purchase coffee from Brazil, and it may lead to a power struggle in the region.
We previously reported about the bi-partisan Congressional Coffee Caucus seeking to exempt coffee import from tariffs. This was due in part to how it could destabilize the region and allow China, seen as a rival powerhouse to the United States, to step in and fill the power vacuum. If China starts buying more coffee in the region, as has been the trend over the last decade, their strategic presence could outweigh that of America’s. Which appears to be where this is heading.
As reported by CNN, the Chinese embassy in Brazil recently announced they have authorized 183 Brazilian companies to export coffee to China. The contracts are said to last for five years. The embassy has since taken to Twitter, where all politicking is done these days, sharing a video of representatives from Chinese “food delivery giant” Meituan, writing that “Brazil is also consolidating its presence in China with its beloved Brazilian coffee.”
In 2024, China imported just under $1 billion worth of coffee in total, so the country is unlikely to account for all Brazilian coffee no longer heading to the United States. And there are talks of a tariff exemption for coffee, the catch being that they will only be enacted after a trade deal is reached. Further complicating the issue is that the tariff against Brazil, one of the few countries with which America is in a trade surplus, appears to be politically motivated, stemming from how the president feels the former Brazilian president and Trump ally is being treated in the courts (read: he’s been charged with attempting a coup).
It all points to a shakeup in the global coffee industry and the countries that rely on them. And in the mean time, coffee in America is getting more expensive (and not for good reasons) while American influence in the region is deteriorating. I guess trade wars really are easy, so long as you don’t care about the casualties or the outcome.
Zac Cadwalader is the managing editor at Sprudge Media Network and a staff writer based in Dallas. Read more Zac Cadwalader on Sprudge.
