50% of the tariff in relation to Brazilian imports entered into force on Wednesday, July 30thTwo days before they were originally announced. America is the largest coffee trade partner in Brazil, importing $ 1.9 billion last year, about a third of all coffee imported in the US. In front of the tariff, experts predicted that this would cause a global shock in coffee trade; America would start buying somewhere else, leaving Brazil to search for novel buyers.
Which they now have. China is now taking huge steps to buy coffee from Brazil and this can lead to a struggle for power in the region.
Earlier, we informed about Biptisan Congressed Kauck Kawowy, who tried to release the import of coffee from tariffs. This was partly caused by how it can destabilize the region and allow China, perceived as a competing power for the United States, to enter and fill the vacuum of power. If China starts buying more coffee in the region, like the trend over the past decade, their strategic presence may outweigh the advantage in America. Which seems to be where it is going.
As reported CNNThe Chinese embassy in Brazil recently announced that she authorized 183 Brazilian companies to export coffee to China. The contracts are said to last for five years. Since then, the embassy has started to Twitter, where all the politician takes place nowadays, sharing the film of the Chinese “Food Giant” Meituan, writing that “Brazil consolidates his presence in China with his beloved Brazilian coffee.”
In 2024, China imported coffee with a value of just below $ 1 billion, so this country is unlikely that the entire Brazilian coffee would not go to the United States. Talks about tariff release for coffee, because they will be adopted only after the trade agreement is achieved. Further complication of the issue is that the tariff against Brazil, one of the few countries in which America is in a commercial surplus, seems to be politically motivated, resulting from how the president believes that the former president of Brazil and Trump’s ally is treated in courts (read: he was accused of assignment).
All this indicates a shock in the global coffee industry and the countries that rely on them. In the meantime, coffee in America is becoming more steep (and not for good reasons), while the American influence in the region deteriorates. It seems to me that trading wars are really uncomplicated, unless you care about losses or result.
