Trump’s Tariffs Lowers Prices in Latin America, Rise in USA
Trump’s tariff policy has varying effects on consumers, both in the short and long term.
By Deutsche Welle (Confidencial)
HAVANA TIMES – While in the US consumers are facing increasingly higher prices, in Latin America food is getting cheaper. At the Bolívar Street supermarket in Rio de Janeiro, customers are astonished: the prices of coffee and meat have dropped.
“At last some good news in these difficult times,” Julienne Freitas, a customer there, told DW. Her impression is confirmed by a recent survey conducted by the Inter-Union Department of Statistics and Socioeconomic Studies (Dieese) and the National Supply Company (Conab).
According to this study, the prices of staple foods such as tomatoes, meat, rice, and coffee fell in August 2025 compared to July in 24 of Brazil’s 27 state capitals.
Tariffs and Agricultural Cycles: Factors Affecting Prices
The price drop observed by Brazilian consumers is tied to the natural cycles typical of agriculture, says Leandro Dias, from the Brazilian platform AgroDeri, which specializes in digitizing the agricultural market.
“In agriculture, we live by cycles. In the case of coffee, for example, we had a good harvest, which naturally increased supply and reduced prices. With meat, something similar is happening: the cattle cycle is in a phase of high supply of fattening livestock, so the domestic market is feeling this drop in prices,” he explained in an interview with DW.
However, there is another factor to consider: US tariffs on Brazilian products. “Excessive tariffs cause inflation in the receiving country and curbs competitiveness abroad,” Dias points out.
In other words, US consumers are now noticing rising prices on foods that Washington has imposed tariffs on. By contrast, prices for those same products are falling in their countries of origin.
“In Brazil, tariffs are having a short-term effect on the balance between supply and demand for the products subject to them—that is, coffee and meat,” economist Douglas Eustaquio, of Grupo Boticario, one of Brazil’s largest cosmetics companies, confirmed to DW.
Due to the tariffs, products that were previously destined wholly or partly for the US market will now remain in Brazil. “And this surplus will supply the domestic market,” Eustaquio said.
Tariffs on Brazil: Consequence of Bolsonaro’s Trial
The tariffs imposed by Donald Trump on Brazil are related to the trial of former president Jair Bolsonaro, who was sentenced by Brazil’s Supreme Federal Court to 27 years in prison for attempting a coup d’état. Washington imposed punitive tariffs in response to the trial, citing concern over repression of the opposition and of freedom of expression.
However, the Brazilian government insists that its judiciary is independent. Current president Luiz Inácio Lula da Silva has criticized the tariffs as unfair, pointing out that the United States runs a trade surplus with Brazil.
Between January and July 2025, Brazilian exports to the United States amounted to nearly $23.7 billion, the highest figure ever recorded for that period, according to the Brazil-US Chamber of Commerce. At the same time, imports rose 12.6% to reach $26 billion, which brought the U.S. trade surplus with Brazil to $2.3 billion.
Long-Term Economic Risks from Tariffs
A phenomenon similar to Brazil’s is occurring in Mexico, with falling tomato prices. Javier Reyes Escamilla, president of the Central-North Regional Cattlemen’s Union of the State of Mexico, told the news outlet Milenio: “In the region, there is a large production. Producers from the north of the country are trying to sell it in the central [Mexican] states instead of exporting it to the US, so the price is going down.”
Although consumers in producing countries may celebrate lower prices in the short term, tariffs will have negative long-term consequences, says Brazilian economist Dirlene Silva: “If the producer loses access to an important market like the US, there is no longer any incentive to invest.”
This translates into less technology, lower productivity, and even a loss of quality. Over time, production could decline, and prices could rise again, to the detriment of Brazilian and other Latin American consumers.
Published in Spanish by Confidencial and translated and posted in English by Havana Times.