President Donald Trump has pulled back tariffs on certain Brazilian exports, a decision clearly aimed at calming down grocery prices that have become a political headache for the administration. The move comes as trade talks with Brazil show signs of progress.
What Changed on the Tariff Front
In an executive order issued Thursday, Trump carved out exceptions to the sweeping 40% tariffs he had slapped on Brazil earlier this year under Executive Order 14323. The new order specifically exempts "certain agricultural imports" from the duties.
Trump cited his phone call last month with Brazilian President Luiz Inácio Lula da Silva and what he called "initial progress in negotiations with the Government of Brazil" as the reason for the shift. Translation: beef and coffee from Brazil can now enter the United States tariff-free again, which should help consumers who've been watching their grocery bills climb.
The original tariffs were pretty dramatic. Trump had imposed sweeping 50% tariffs on Brazil back in July, accusing the Brazilian government of running a "witch hunt" against former President Jair Bolsonaro, along with what he described as "insidious attacks on Free Elections" and censorship of social media platforms.
According to Trump, negotiations are currently "ongoing" with Brazil on all the issues that were "identified in Executive Order 14323." So this appears to be a partial thaw, not a complete reset.
Why This Matters Now: Grocery Prices Are Brutal
The Trump administration has been feeling the heat over soaring prices for coffee, beef, and other kitchen staples that Americans actually care about.
Coffee prices recently touched a 50-year high, driven by reduced crop harvests across major growing regions. Trump's tariff policies didn't help matters. Retail coffee prices in August jumped 21% compared to the same month last year, marking the largest annual increase since 1997. That's the kind of price move people notice every morning.
Beef prices have similarly hit new highs this year, partly due to a prolonged drought in the western United States. Trump had promised to tackle this problem last month, and now he's following through.
The political pressure got intense enough that Senate Republicans actually joined Democrats last month to pass legislation overturning Trump's Brazil tariffs. They called it "bogus emergency declarations" and pointed to the soaring prices consumers were facing. When you lose your own party on a trade issue, it's time to reconsider.
Market Reaction: Mixed Signals After Hours
Stocks with exposure to Brazilian imports, particularly coffee and cattle, traded mixed in after-hours trading following the executive order late Thursday night.
| Stocks | After-Hours | Year-To-Date |
| Starbucks Corp. (SBUX) | +0.25% | -10.36% |
| Keurig Dr Pepper Inc. (KDP) | -0.18% | -14.33% |
| JM Smucker Co. (SJM) | +0.89% | -6.84% |
| Pilgrims Pride Corp. (PPC) | -1.04% | -20.37% |
The modest moves suggest investors are still digesting what this means for supply chains and profit margins going forward.