Brazilian Smallholder Coffee Farmers Fear For The Future After Tariff Announcements – CoffeeTalk

Brazilian José Natal da Silva, a coffee plantation owner in Rio de Janeiro state, is facing anxiety following President Donald Trump’s announcement of a 50% tariff on Brazilian imported goods. Experts expect the tariff to drive down the price of coffee in Brazil, which has sparked fear among sectors with deep ties to the American market such as beef, orange juice, and coffee. Minor coffee producers say the import tax will hit their margins and add to the uncertainty already generated by an increasingly dry and unpredictable climate.

Brazil, the world’s largest coffee producer, exports around 85% of its production. The United States is the country’s top coffee buyer and represents around 16% of exports, according to Brazil’s coffee exporters council Cecafe. The president of Cecafe’s deliberative council, Márcio Ferreira, told journalists last week that he thinks the U.S. will continue to import Brazilian coffee, even with the hefty tariff. “It’s obvious that neither the United States nor any other source can give up on Brazil, even if it’s tariffed,” he said.

The tariff will likely decrease Brazilian coffee’s competitiveness in the U.S. and naturally reduce demand, which principally affects small producers, who have less financial power to make investments or support themselves in a period like this. Family farmers produce more than two-thirds of Brazilian coffee, and they are a majority in Rio state’s northwestern region, where most of the state’s coffee production lies. Coffee farming is the primary economic activity in these municipalities.

Last year, drought, made more likely by human-caused climate change, devastated large swathes of da Silva’s production. The reduction in supply pushed coffee prices up, but only after many small-scale farmers had already sold all their crops. Since peaking in February, prices of arabica have fallen, dropping 33% by July, according to the University of Sao Paulo’s Center for Advanced Studies in Applied Economics.

Paulo Vitor Menezes Freitas, 31, who also owns a modest plantation of around 35,000 coffee trees in the nearby municipality of Varre-Sai, said the tariff’s announcement increased his fears for the future. He said the tariff’s announcement increased his fears for the future, as people will start pulling out their coffee and finding other ways to survive because they won’t have the means to continue. In addition to slashing the value of his coffee beans, Menezes Freitas said the tariff will impact machinery and aluminum, goods that producers like him use every day.

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