LONDON/NEW YORK CITY: American grocery bills may be headed higher as coffee and orange juice prices face upward pressure from new tariffs on Brazilian imports, traders and industry experts warned.

The Trump administration's decision to raise tariffs on all goods from Brazil to 50 percent—up from 10 percent—has sparked alarm among food importers. The steep duty, set to take effect August 1, is expected to disrupt the flow of Brazilian coffee to the U.S., which relies on Brazil as its top supplier.

"A tariff of this size would all but shut down that flow. Brazilian exporters won't absorb it. U.S. roasters can't," said senior coffee broker Michael Nuggent of MJ Nuggent & Co. "Bottom line: Brazil will sell its coffee elsewhere. The U.S. will buy coffee from someone else—Colombia, Honduras, Peru, Vietnam—but not at Brazil's volume or price."

Brazil shipped 8.14 million 60-kg bags of coffee to the U.S. in 2024, more than 30 percent higher than the previous year, according to exporter group Cecafe. About a third of the coffee consumed in the U.S. comes from Brazil, making the country a critical source for American roasters.

"I don't think it would be economically feasible to sell Brazilian coffee to the U.S. with the 50 percent tariff," said the Brazil head of a major global commodities firm, who declined to be named. "Let's see how this will evolve, but it would be very complicated."

Coffee producer Paulo Armelin, who sells directly to U.S. buyers, said talks for 2025 shipments were already strained due to a 70 percent spike in coffee prices last year. "We will have to look for other markets, maybe Germany," he said.

Orange juice could be the next product hit. More than half of what's consumed in the U.S. comes from Brazil, and domestic supply has plummeted due to hurricanes, frost, and citrus greening disease. A USDA report earlier this year forecast an 88-year low for the U.S. orange harvest and a record low in orange juice production for the 2024/25 season.

Other Brazilian goods—like sugar, wood, oil, and ethanol—may also be affected. Brazil is the world's second-largest producer of ethanol, though only a small portion is exported to the U.S.

Some domestic industries have welcomed the move. U.S. cattle producers, for example, have blamed Brazilian beef imports for shrinking the domestic industry. "We fully support this tariff on Brazil," said rancher group R-CALF USA. "We need to rebuild and reduce our nation's dependency on imported food."

U.S. Commerce Secretary Howard Lutnick has indicated that some essential natural resources, including tropical fruits and spices not produced domestically, could be exempt from the new tariffs depending on negotiations.

The tariff announcement came alongside a letter from Donald Trump to Brazilian President Luiz Inácio Lula da Silva, criticising Brazil's stance on free elections, social media platforms, and digital trade practices involving U.S. firms.