Trump imposes tariffs on eight countries including Brazil, causing global trade to face another storm

Behind the price increase of a cup of coffee is the difficult situation of South America's largest economy being pushed into a global trade vortex, as well as the imminent rise in commodity prices on US supermarket shelves.

Carlos Silva, the owner of a coffee plantation in Sao Paulo, stared at the news on his phone screen with a furrowed brow. The Trump administration announced a 50% tariff on all imported goods from Brazil starting from August 1st, resulting in nearly 30% of his coffee bean export orders being cancelled overnight. This is much higher than the 10% tax rate in April, "he said to the workers beside him with a bitter smile." Our coffee may become a luxury item in American supermarkets

At the same time, in a supermarket in Virginia, consumer Lisa looked at the Brazilian orange juice labels on the shelves completely unaware that the prices of these products could rise by 20% -30% in a month. The global trade landscape is experiencing a new round of severe fluctuations, and the cost of living for ordinary people is about to directly bear the impact of this tariff storm.

The tariff storm in early July was not sudden. On July 7th, Trump signed an executive order extending some of the tariff policies originally scheduled to expire on July 9th until August 1st, and officially implementing new "reciprocal tariffs" measures. Previously, the Trump administration had announced tariffs ranging from 25% to 40% on 14 countries, involving manufacturing giants such as Japan and South Korea, as well as multiple Southeast Asian countries. This week, the tariff stick swung towards a new target: Brazil faced a punitive tax rate of 50%, setting a new record in this round of tariff actions. Algeria, Iraq, Libya, and Sri Lanka have been included in the 30% tariff list. Brunei and Moldova face a 25% tariff, while the Philippines is subject to an additional 20% tariff. All new tariffs will officially come into effect on August 1st.

The White House's action against Brazil carries a distinct political color. Trump has classified the legal proceedings of former Brazilian politicians as "political persecution" under the pretext of "defending democratic values," thereby implementing high tariffs. This move is in sharp opposition to the "multilateralism sovereignty principle" emphasized by Brazilian leaders at the BRICS summit last week.

As the second largest supplier of goods to the United States, Brazil sends nearly 8 million bags of coffee, over half of its orange juice, and a large amount of sugar and beef products to the United States every year. A 50% tariff will significantly weaken the competitiveness of these products in the US market.

The market response is rapid and intense. After the tariff news was announced, the Brazilian currency Real fell more than 2% against the US dollar in a single day, hitting a new low for the year. The stock prices of major export companies fell in response, with the aviation and energy sectors leading the decline in the Brazilian stock market. This is not just a trade issue, but a comprehensive challenge to the fundamentals of the Brazilian economy, "analyzed Fernando Almeida, an economics professor at the University of S ã o Paulo." Domestic inflation may intensify, unemployment rates may rise, and our fragile recovery process will face significant threats

American consumers are also not immune. Industry data shows that 30% of coffee imports in the United States come from Brazil, 50% of orange juice supply relies on Brazil, and 80% of global orange juice trade is dominated by Brazil. After the imposition of tariffs, the price of coffee beans on supermarket shelves is expected to rise by 20% -30%, and the retail price of juice products may break through historical highs. The energy sector is also under pressure, and the rising cost of ethanol imports may be transmitted to fuel prices, further pushing up inflationary pressure in the United States.

Except for Brazil, other countries on the list of newly added tariffs in this round are also facing severe challenges:

Algeria, as a North African country rich in oil and gas resources, has close trade relations with China in the fields of mechanical and electronic equipment and textiles. A 30% tariff will impact its industrial raw material import chain.

As a member of RCEP, the Philippines' 20% tax rate, although relatively low, will still affect its exports of electronic products to the United States. Previously, Chinese foreign trade enterprises had regarded the Philippines as a potential destination to avoid high tariffs, but now this path is also facing challenges.

Iraq and Libya, as oil exporting countries, a 30% tariff may lead to an increase in energy trade costs, thereby affecting global crude oil price fluctuations.

Sri Lanka's textiles, Brunei's energy products, and Moldova's agricultural exports will all be significantly affected. The common characteristics of these countries are relatively single economic structures, high dependence on exports, and limited ability to cope with tariff shocks.

UBS analysts warn that emerging market stocks may underestimate the risk of US tariffs. More than 35% of revenue in emerging markets comes from exports, with 13% related to the United States. If the average tax rate in the United States increases from 16% to 21%, emerging market earnings may decrease by 6% to 9%.

This dispute has exposed the fragility of the current trading system. Selective sanctions under the guise of "values diplomacy" are undermining the existing global division of labor network.

The Brazilian government has urgently convened a cross departmental meeting to formulate a response plan, implying that it does not rule out taking reciprocal countermeasures or accelerating the establishment of trade alliances with other emerging markets.

Regional cooperation within the framework of the BRICS mechanism is considered an important breakthrough. Brazil is pushing to strengthen its local currency settlement system with member countries and reduce its dependence on the US dollar. Some economists suggest expanding the export share to markets such as China and India, and promoting the upgrading of agricultural product processing industries to enhance added value.

A multipolar world requires diversified trade channels, "a source from the Brazilian Ministry of Foreign Affairs revealed." We are discussing emergency response plans with our BRICS partners, and establishing a settlement mechanism that bypasses the US dollar will be one of the core issues. "At the same time, the global supply chain is undergoing deep adjustments. The Wealth Solutions Department of Standard Chartered Bank recently released the "Global Market Outlook for the Second Half of 2025", which pointed out that the expectation of a weaker US dollar is guiding funds to shift from traditional safe havens to emerging markets, especially those regions with growth potential and policy support.

Faced with high tariff barriers, affected countries are seeking solutions from multiple perspectives:

Market diversification has become a common choice. Brazil plans to expand its export share to markets such as China and India, and promote the upgrading of the agricultural product processing industry to enhance added value. Previously, after nearly 400 slaughterhouses in the United States were disqualified from exporting to China, Brazil has begun to fill the gap in the Chinese beef market.

Regional economic cooperation is accelerating. The trade cooperation among BRICS countries is strengthening, especially in terms of local currency settlement. In March 2023, Brazil and China reached an agreement that they would no longer use the US dollar as the intermediate currency, but use their own currency for trade settlement. This model may be extended to other emerging economies.

Industrial upgrading and value-added enhancement. Some economists suggest that Brazil promote the upgrading of its agricultural processing industry, shifting from exporting raw materials to exporting high value-added products. Brazil is striving to obtain more qualifications for slaughterhouses to export to China, in order to enhance the value of meat exports.

The response strategies at the enterprise level are also being adjusted. Wang Xinjie, Chief Investment Strategist of Wealth Management Department of Standard Chartered Bank, said, "Thanks to the support of fiscal policy and the possible weakening of the US dollar, we are optimistic about the technology, communication services, and non essential consumer goods industries, and maintain the recommendation of overweight Chinese stocks." The bank raised Asian (excluding Japan) stocks to overweight, believing that the weakening of the US dollar will prompt capital inflows into emerging markets, and the valuation of the region is attractive.

Inside the Presidential Palace in Brasilia, the economic team stayed up all night. The Minister of Finance and the Minister of Agriculture are fiercely discussing the response plan: should we take reciprocal countermeasures or accelerate the implementation of the local currency settlement system among BRICS countries? At the same time, officials from the Ministry of Trade are urgently contacting Beijing to discuss specific arrangements for expanding Brazilian beef exports to China.

The Brazilian cargo ship docked at the port of Miami is accelerating its unloading. These early departing cargo ships are loaded with enough coffee beans and orange juice to consume the US market for two months. Workers know that these are the last few batches of "affordable" Brazilian goods before the tariffs take effect on August 1st.

The global trade landscape is quietly changing. As Brazil accelerates its approach to BRICS countries and promotes its own currency settlement system; Emerging manufacturing centers such as Mexico and the Philippines are repositioning their industrial roles, forming a new multipolar trade order that reduces reliance on a single market and strengthens regional cooperation.