Trump Tariff Cut May Ease Pain for US Coffee, Beef Lovers
Prices Pressures Should Relax for American Consumers Needing That Cup of Caffeine in the Morning, Red Meat at Lunch
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President Donald Trump’sdecisionto remove a key tariff on Brazilian coffee and beef may deliver some relief to markets and American consumers who have struggled with soaring prices for the key staples.
Brazil is the top global supplier of both commodities, and a 40% tariff announced in July caused shipments into the U.S. to slump. The resulting supply squeeze had aggravated a price surge for consumers already facing decades-high food inflation.
The executive order signed by Trump on Nov. 20 is expected to ease that pressure. Last week, he cut a separate 10% duty off those products.
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“Two-thirds of American adults drink coffee each day, and every cup will cost less thanks to President Trump’s decision to remove tariffs on coffee imports from Brazil,” the National Coffee Association said in a statement.
The decision, which includes a basket of commodities, reflects the need to bring down prices for food, as Americans have struggled under the strain of high grocery bills and given Trump increasingly poormarksover his handling of the economy. U.S.consumer sentimentin November to one of the lowest levels on record as Americans’ views of their personal finances soured.
Futures for the premium arabica coffee dropped as much as 6.6% to an almost two-month low in New York on Nov. 21 before paring declines. Arabica futures had risen to a record high in October as tariffs added to a shortage caused by lackluster harvests across the globe. An inflation index for roasted coffee surged to an all-time high in August, according to the Bureau of Labor Statistics.
“We expect exports to resume,” StoneX analyst Fernando Maximiliano said. Fears of a shortage in the U.S. market had pushed futures prices higher and now some relief is expected, he added.
Beef, meanwhile, has been a particularly thorny issue for the Trump administration, as consumer prices have soared to records amid a shrinking domestic cattle herd. The U.S. has increasingly relied on foreign shipments to fill the gap, helping to send cattle prices diving on expectations for an influx. But Brazilian beef shipments have fallen sharply following tariff threats.
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Live cattle futures dropped as much as 3.4% on Nov. 21, to the lowest since June, before paring losses.
Still, cheaper costs for meat producers aren’t yet translating to less expensive beef for consumers, as demand has kept prices elevated.
It's unclear if the tariff removal will be enough to spur “a dramatic rise” in imports from Brazil, analysts at Steiner Consulting Group said in a report. That’s as declining cattle inventories in the South American nation and high beef demand from China present challenges. Still, the analysts pointed to a possible scenario where higher imports and less exports out of the U.S. could “moderate domestic beef price inflation” in 2026.
For Brazil, the impact of tariffs has been somewhat muted as the country was able to keep beef exports to all countries on the rise this year. Lower sales to the U.S. were offset by higher shipments to other destinations, including Mexico and China.
“Those who ended up being harmed more than anyone by the tariff were the American producers and consumers,” said Marcos Jank, a senior professor at Insper. Low beef availability in many other regions meant Brazil could find other markets for its product, he added.
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