The Plan of the President of USADonald Trump, from August 1 can devastate the belt citrus of Brazil, since factories reduce the work and producers of orange They consider to let the fruits rot in the midst of a sharp drop in prices.
“I see that it can really be fruit in the foot for not having a market and you will not spend to take and not to sell,” said producer Fabrício Vidal on his farm in Formoso (MG).
New rates can make their fruits impossible to enter the United States, a trade valued at about $ 1.31 billion in the crop closed in June.
This month, the prices of orange in Brazil fell to R $ 44 to Caixa, almost half of what they were a year agoaccording to measurements of CEPEA of the University of São Paulo (USP), illustrating how Trump’s disruptive business policies can sow chaos even before they are implemented.
“Each day that comes closer to the entry into force of tariffs increases anxiety about what may happen,” said Ibiapaba Netto, Citrusbr’s CEO, which represents orange juice exporters in an interview with Reuters.
Impact for consumers
US orange juice production has fallen to the lowest level in half a century in the 2024/25 crop, with an estimated volume of 108.3 million gallons, according to data from the US Department of Agriculture cited by Cepea in a recent report, which shows that imports will represent 90% of US supply by September.
US consumers, as well as the. Half of orange juice that Americans drink comes from Brazil, sold by brands such as Tropicana, Minute Maid and Simply Orange.
Brazil, which produces 80% of orange juice in the world, will also be difficult to replace.
The US has become more dependent on orange juice imports in recent years due to “Greening” disease in citrus crops, hurricanes and climate adversities.
But the new rate on Brazilian imports represents a 533% increase over the $ 415 tax per ton already currently charged when the juice enters the country.
Last week, Johanna Foods, a new Jersey fruit juices, contested in court the proposed tariffs on Brazilian orange juice, claiming that they would cause “significant and direct financial damage to the company and US consumers.
Tariffs can also mean problems for Coca-Cola and Pepsi, who account for about 60% of orange juice sold in the United States, said Netto. None of the companies responded to requests for comment.
Unleavened answer
Brazil will not easily replace US consumers, who are among the most eager orange juice consumers in the world.
Normally, only higher -income countries import orange juice, limiting Brazil’s reach potential in new markets. Brazilian orange juice is sold only to about 40 countries, which represents about a third of the destinations that buy Brazilian meat, for example, according to trade data.
Netto, from Citrusbr, noted that high tariffs already applied by markets such as India and South Korea, as well as low family income in China, impaired trade with Brazil.
The European Union, in turn, already buys about 52% of the total of Brazilian exports, which makes it unlikely that countries help to compensate for Brazil for lost businesses with the US.
Companies will have few options.
One would be to export Brazilian orange juice by Costa Rica, which some companies already do to avoid current tariffs, said Arlindo de Salvo, an independent orange consultant. But it is unclear if exporters will be able to do this when the new rate starts to be applied.
Citrusbr said such “triangulation” via Costa Rica is impossible according to the rules of the Organization for Economic Cooperation and Development (OECD).
While companies need to find new ways for Brazilian juice consumers, Formoso farmers fear the worst. The prices paid to them have already fallen to about a third of what the producers received at the same time last year, the producers said, making the cost of harvesting the oranges almost worthwhile.
Producer Ederson Kogler said the only solution would be to find other markets. But, he added, “only these are things that don’t happen overnight.”
