August 2025 was an especially bitter month for the global coffee industry chain and every American consumer. Data shows that Brazil, the world’s largest coffee producer, saw a sharp drop of 55.24% in its exports to the United States, from about 450,000 bags in July to 250,000 bags. This sharp decline originated from the fact that the United States imposed a 50% high tariff on Brazilian coffee and other export products in early August.
Coffee exports to the United States were once prosperous, but now they have suddenly come to a halt. Masio Ferreira, the head of Cecafe (Brazilian Coffee Exporters Association), expressed it so tactically: “Tariffs have put coffee exports in a survival crisis, the market has fallen into deep uncertainty, and there is no limit to price fluctuations.” The impact on Brazilian farmers, exporters, and the entire supply chain reflects the intense collision between policy and market waves.
This situation is not isolated. The root cause of this round of tariff wave can be traced back to the deeper diplomatic and trade tensions between the United States and Pakistan. Since April 2025, after the Trump administration took several tough measures to impose high taxes on goods such as steel and aluminum, the United States has now targeted high-frequency Brazilian trade items like coffee, meat, and fruits, raising the basic tariff on Barcelona from 10% to 50%. This is not only a trade move but is also widely regarded as a means of political pressure.
In this wave of policy storm, J.M. Smucker Group, a well-known American food enterprise, publicly admitted for the first time that its performance was severely affected by tariffs. The company’s profit margin dropped sharply in the first fiscal quarter to a net loss of approximately 43.9 million US dollars. Eventually, its share price fell in response, and it is expected that the retail price may continue to rise in the second half of the year to ease cost pressure. In addition, MarketWatch reported that the price of ground retail coffee in the United States has soared by more than 30% year-on-year, and some brands are struggling due to tight supply chains.
This chain reaction spread rapidly to retail terminals. Barron’s reported that the price of coffee in American household shopping bags has risen by 14.5% to $8.41 per pound. Cafe operators are deeply worried that the continuous cost hikes by suppliers will force them to raise prices, thereby losing regular customers.
Against this backdrop, Brazilian President Lula has adopted a cautious stance, emphasizing that “dialogue takes precedence over retaliation.” The Brazilian Ministry of Foreign Affairs is reviewing the Trade Reciprocity Law and has submitted a formal protest through the World Trade Organization (WTO), but there are no signs of a rush to retaliate. Meanwhile, Brazil is accelerating the expansion of its export channels to other markets. Agricultural product export data shows that China has approved 183 Brazilian enterprises to export coffee as a step towards market diversification.
In the long term, the Brazilian coffee industry still faces many challenges: factors such as extreme weather disturbances caused by climate change, pest spread, and rising temperatures in planting areas are all eroding its agricultural foundation.
Brazil has long held the top position in global coffee production and export, accounting for approximately one-third of the world’s total output, with the majority coming from regions such as Minas Gerais, São Paulo, and Paraná. Since the 18th century, its coffee cultivation has become a pillar of the national economy. In the past, coffee exports once accounted for as much as 60% of the total exports. Although the proportion has declined in recent years, it remains one of the important sources of income for the country.
In conclusion, this sharp decline is not merely an economic phenomenon, but rather the result of the combined effect of global trade policies, political games, and changes in industrial structure. Future trends, including whether trade frictions can be negotiated to cool down, how Brazil’s coffee industry can transform into diversified exports, and whether the global coffee consumption market can withstand price fluctuations, will all be revealed one by one in subsequent developments.
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