Brazil has started to fight back against the extensive U.S. tariff that could affect more than one-third of its exports through Vice President Geraldo Alckmin who announced a plan to request a reduction in coffee exports.
The U.S. government has established a 50% tariff on 35.9% of Brazil’s export value through an executive order from President Donald Trump. The existing 10% duties will continue to affect 45% of Brazilian exports but 20% of exports will face U.S. global tariffs ranging from 25% to 50%.
The agricultural exports of coffee and beef remained under the tariff while aircraft and energy and orange juice received exemptions. Alckmin stated that Americans will pay more for their goods while facing a “lose-lose situation” because they cannot produce coffee.
The government of Brazil has established backup plans to defend affected industries through financial assistance and tax benefits which might exceed national budget limits. The U.S. market diversion of goods could lead to domestic supply growth which might help control inflation according to Alckmin.
The tariffs function as a response to Brazil’s supposed backing of former President Jair Bolsonaro whom Trump believes tried a coup in 2022. The Brazilian government continues to negotiate with Washington to reduce the impact of trade restrictions.
