The Monday Morning Stimulus

With some assist from Kendel Kay:

Reuters whines Trump's Brazil tariff rattles coffee market, could raise prices in US

The 50% tariff that the Trump administration has slapped on Brazilian imports has rattled the global coffee market and could make the price of a cup of coffee in the U.S. jump beyond recent highs.

Brazil is the world's largest grower and exporter of coffee, while the U.S. is its biggest client and the world's largest drinker of the beverage, with nearly 200 million Americans having a cup every day.

Coffee trade sources said the new duty announced on Wednesday, if confirmed on August 1, could halt new shipments of Brazilian coffee to the U.S., which imported 8.14 million 60-kg bags of the product from the South American country in 2024, or 33% of its total consumption.

"A tariff of this size would all but shut down that flow. Brazilian exporters won't absorb it. U.S. roasters can't," said senior coffee broker and consultant Michael Nugent, owner of California-based MJ Nugent & Co.

"Bottom line: Brazil will sell its coffee elsewhere. The U.S. will buy coffee from someone else - Colombia, Honduras, Peru, Vietnam - but not at Brazil's volume or price," he said.

First, I bet the 50% tariff doesn't go into effect, Brazil will make a deal. And the import cost of coffee is only part of the cost.  We'll see. 

The Wombat has Rule Five SundayMonday: Belated Bikini a day late, and no FMJRA at all, but who's counting?