Trump Tariff Cut May Ease Pain for US Coffee and Beef Lovers

(Bloomberg) — US President Donald Trump’s decision to remove a key tariff on Brazilian coffee and beef may deliver some relief to markets and American consumers who have struggled with soaring prices for the key staples.

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Brazil is the top global supplier of both commodities, and a 40% tariff announced in July caused shipments into the US to slump. The resulting supply squeeze had aggravated a price surge for consumers already facing decades-high food inflation.

The executive order signed by Trump on Thursday is expected to ease that pressure. Last week, he cut a separate 10% duty off those products.

“Two-thirds of American adults drink coffee each day, and every cup will cost less thanks to President Trump’s decision to remove tariffs on coffee imports from Brazil,” the National Coffee Association said in a statement.

The decision, which includes a basket of commodities, reflects the need to bring down prices for food, as Americans have struggled under the strain of high grocery bills and given Trump increasingly poor marks over his handling of the economy. US consumer sentiment fell in November to one of the lowest levels on record as Americans’ views of their personal finances soured.

Futures for the premium arabica coffee dropped as much as 6.6% to an almost two-month low in New York on Friday, before paring declines. Arabica futures had risen to a record high in October as tariffs added to a shortage caused by lackluster harvests across the globe. An inflation index for roasted coffee surged to an all-time high in August, according to the Bureau of Labor Statistics.

“We expect exports to resume,” said StoneX analyst Fernando Maximiliano. Fears of a shortage in the US market had pushed futures prices higher and now some relief is expected, he added.

Beef, meanwhile, has been a particularly thorny issue for the Trump administration, as consumer prices have soared to records amid a shrinking domestic cattle herd. The US has increasingly relied on foreign shipments to fill the gap, helping to send cattle prices diving on expectations for an influx. But Brazilian beef shipments have fallen sharply following tariff threats.

Live cattle futures dropped as much as 3.4% on Friday, to the lowest since June, before paring losses.

Still, cheaper costs for meat producers aren’t yet translating to less expensive beef for consumers, as demand has kept prices elevated.

Its unclear if the tariff removal will be enough to spur “a dramatic rise” in imports from Brazil, analysts at Steiner Consulting Group said in a Friday report. That’s as declining cattle inventories in the South American nation and high beef demand from China present challenges. Still, the analysts pointed to a possible scenario where higher imports and less exports out of the US could “moderate domestic beef price inflation” in 2026.

For Brazil, the impact of tariffs has been somewhat muted as the country was able to keep beef exports to all countries on the rise this year. Lower sales to the US were offset by higher shipments to other destinations including Mexico and China.

“Those who ended up being harmed more than anyone by the tariff were the American producers and consumers,” said Marcos Jank, a senior professor at Insper. Low beef availability in many other regions meant Brazil could find other markets for its product, he added.

(Updates prices, adds analyst comment on beef imports in 11th paragraph.)

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