It is no news that President Trump considers imposing tariffs on trade partners. This time, the target is Brazil—a country that could face a 50% tariff on its products under the latest announcement from the Administration.
What Are Tariffs?
Tariffs are an economic tactic that most economists reject as an effective means to collect government revenue. As the International Trade Administration explains, a tariff is a tax levied by governments on the value of imported goods. In some cases, customers are charged national sales and local taxes in addition to tariffs. As international trade expert Robert Lawrence observes, tariffs are most likely to be passed on to American consumers who purchase the affected imported goods.
The Proposed Tariff
The Office of the United States Trade Representative reports that, in 2024, the U.S. total goods trade with Brazil reached $92 billion. That same year, America experienced a trade surplus of $7.4 billion with Brazil. Despite this surplus, President Trump announced 50% tariffs on Brazilian goods effective August 1.
Goods That Could Become More Expensive
If these tariffs are imposed, not only will Brazilian exporters be harmed, but the Americans who pay the tariffs will be harmed by inflated prices for goods from Brazil. Multiple goods might be vulnerable to tariffs, including coffee. According to the U.S. Department of Agriculture, in 2023, 35% of U.S. unroasted coffee came from Brazil, making it a top supplier of coffee and coffee products for Americans, who will likely face higher coffee prices. Another good that could see price hikes is beef—Brazil accounts for 21% of all U.S. beef imports. Analysts warn that ground beef and hamburger meat prices could increase. Orange juice prices could also increase, as around 60% of U.S. orange juice imports come from Brazil.
While the Trump Administration argues that tariffs on Brazil will benefit Americans, data suggests otherwise. As mentioned, tariffs are generally passed on to consumers, since producers can only absorb the extra cost for so long. The Trump Administration says it wants to reduce trade deficits, but currently, the U.S. enjoys a trade surplus of billions of dollars with Brazil, making the rationale behind these tariffs unclear. Rather than increasing the wealth of Americans, tariffs on Brazil will raise the price of coffee, beef, and orange juice—and, more importantly, damage the U.S. trade relationship with Brazil.
Imposing tariffs on Brazil requires careful consideration, as this economic sanction could benefit China—and Xi Jinping knows it. Strengthening ties with countries in the Western Hemisphere is a top priority for China. Earlier this year, China hosted high-level delegations from multiple countries from Latin America and the Caribbean, announcing a $9 billion investment credit line for the region. Additionally, the Chinese government introduced visa-free travel to China for citizens of Brazil, Argentina, Chile, Peru, and Uruguay. While the White House risks alienating allies, China is deepening its economic and diplomatic relationships—and has now become South America’s largest trading partner and is second only to the U.S. in Latin America as a whole. The real question, then, is whether tariffs on Brazil are increasing wealth for Americans—or increasing prices while jeopardizing national security by pushing allies and potential allies closer to Beijing.