Henrik Sorensen
President Trump’s threat to hike import tariffs on Brazil to 50% beginning August 1 did little to dent shares of Starbucks (NASDAQ:SBUX), J.M. Smucker Company (NYSE:SJM), or Keurig Dr. Pepper (NASDAQ:KDP), but Dutch Bros (NYSE:BROS) felt the brunt of the tariff risk with a loss of nearly 4% during regular trading hours.
Dutch Bros (NYSE:BROS) reportedly sources more than half of its coffee from Brazil, including its three-bean Private Reserve, which is made from Arabica beans sourced from Brazil, Columbia, and El Salvador.
In response to Brazil’s “insidious attacks on Free Elections,” censorship of Americans on social media platforms, and unfair trade relationship with the U.S., Trump said the U.S. will impose a 50% tariff on imports from the country beginning August 1. The news launched coffee futures higher before settling with a 0.49% gain at Thursday’s close.
The president also cited Brazil’s “Witch Hunt” against former president Jair Bolsonaro in his letter, viewing his prosecution as an “international disgrace.”
Bolsonaro is currently on trial for his role in an alleged coup to overturn the 2022 election results.
“The 50% number is far less than what is needed to have the level playing field we must have with your country and is necessary to have this to rectify the grave injustices of the current regime,” Trump said in a letter to Brazilian president Luiz da Silva, posted on Truth Social.
In response, President Lula said his country will employ an “Economic Reciprocity Law” that authorizes proportional countermeasures against individual countries that negatively impact Brazil’s international competitiveness. Lula also rejected the notion of a trade imbalance, arguing that the $410 billion U.S. surplus with Brazil proves otherwise.
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