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The Decision of the United States to Impose a 50% Tariff on Brazilian Products May Generate Unexpected Impacts on the Domestic Market. One of the Sectors That May Feel the Effects Is Traditional Coffee on Brazil’s Export Agenda.
The new 50% tariff on Brazilian products announced by the United States may alter the price landscape for coffee and beef in Brazil.
According to the Ministry of Finance, this change may increase the supply of these products in the domestic market, putting downward pressure on prices.
Exports Are Expected to Fall
The Secretary of Economic Policy of the Ministry of Finance, Guilherme Mello, stated that the tariff has the potential to significantly reduce Brazilian exports to the U.S. “This 50% tariff is practically prohibitive for a set of products that we export,” he said.
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Among the most affected are beef and coffee.
More Products in the Domestic Market
The government’s assessment is that, with the decrease in exports, part of the production aimed at the external market will be directed to domestic consumption.
This may generate greater supply and consequently lower prices for Brazilian consumers.
Guilherme Mello also pointed out that domestic producers may seek other destinations for their products, especially basic goods such as oil, iron, steel, pulp, meat, and orange juice.
According to him, these items have greater ease of reallocation compared to manufactured goods, such as aircraft and industrial machines.
Caution with Inflation Forecasts in Brazil in 2025
Despite the projections, the secretary emphasized that it is still early to estimate the inflationary effects of the measure. He stated that analyzing the total impact is “very premature.”
If maintained, the tariff could force Brazil to redirect exports and put pressure on the domestic market with greater supply, directly affecting the prices of beef and the price of coffee.
