A few weeks ago, President Trump decided that he did not like the Brazilian Supreme Court trial of former President Jair Bolsonaro who was charged with trying to overturn his 2022 election loss and is set to increase the tariff on Brazil to 50%.

In an article by Gabriela Sa Pessoa and Mauricio Savarese of the Associated Press, they examined what does the US import from Brazil and what would the consequences for the American consumer? Two of the biggest crops grown in Brazil are oranges and coffee.

Ibiapaba Netto, a director of the Brazilian association for citrus juice exporters, said Brazil has no replacement for a country that buys 3 billion litres of orange juice every year and the US does not have enough product at home. About 40% of Brazil’s orange juice go to the US. But about 60% of US imports of orange juice comes from Brazil. Except for a few companies producing 100% Florida orange juice, every other brand depends on Brazil because of a citrus disease in Florida, it could not make up the difference.

America’s coffee habit is almost exclusively on imports. Brazil provides 30% of the American market, followed by Columbia by 20% and Vietnam at 10%.

If tariffs increase imports, then consumers will pay higher prices.

In terms of beef production, Roberto Perosa, president of the Brazilian Association of Exporting Industries, said he had been meeting with partners since the announcement.

Although JBS SA is the largest meat processing enterprise in the world, which is majority controlled by Brazilians with operations in the US, Brazil’s beef is not a competitor for the US as Brazil has offered high production volumes in recent years, which has helped American consumers buy cheaper products.

Linking to dividend paying stocks, all decisions tend to have consequences, and it is important to know what they are. If the government wants to go ahead, that is ok but there will be consequences in terms of higher prices for consumers, it all depends on what you believe the government wants at the end. If it a good thing, then people will pay higher prices and all is ok. If you want lower prices, then finding an alternative will be a motivation.

There are more questions than answers, till the next time – to raising questions.