US President Donald Trump initiated a trade war shortly after beginning his second term in January, implementing higher tariffs on numerous countries. This combative trade policy has resulted in major economic consequences in the U.S. Retrospective and Prospective Impact In addition to its profound impact on transportation in the U.S. Yesterday, for the first time since the 1930s, the average US import tax reached a new record high. This rapid increase in tariffs is raising costs for American consumers and changing the nature of international trade much more broadly.
As this trade war goes, we’ve seen Trump backpedal on some tariffs and negotiate flimsy, yet-to-be-finalized trade agreements. The impacts are acute, particularly in the coffee industry. From mid-August until the middle of November, the U.S. imposed a 50% tariff on Brazilian coffee imports. This extreme action resulted in a year-on-year 75% decrease in US coffee imports from Brazil. In this same period, imports dropped by over 50% compared to the year before.
Impact on Brazilian Coffee Exports
After all, Brazil is currently the largest coffee exporter to the US. Coffee cultivation plays an important role in Brazil’s economy, accounting for as much as 1.8% of the country’s GDP. Recent damaging tariffs have made this important industry more vulnerable than ever. It supports 13% of Brazil’s total jobs, including seasonal and indirect employment.
Márcio Ferreira, a Brazilian coffee producer and exporter, described concern over the burden that the tariffs have created.
“It’s practically impossible to export to that market,” – Márcio Ferreira
As a result of the trade restrictions, Brazil’s coffee exports to its largest coffee market have fallen off a cliff. This fall off, paired with the ongoing economic crisis, has worsened the economic climate between the two countries.
Job Losses in Canada and Economic Contraction in Switzerland
Yet the ramifications of these US tariffs extend much farther than just Brazil. In Ontario, regarded as the industrial heartland of Canada, the manufacturing sector has already been hit hard, losing 36,500 jobs since the start of the year. This latest downturn has pushed Canada’s manufacturing workforce to its lowest level since September 2021.
A statement from Canadian Manufacturers & Exporters noted the severe impact of US tariff actions:
“Manufacturing has been among the hardest hit by US tariff actions.”
Switzerland’s economy experienced a double dip in the third quarter. This decrease represents the largest loss since the height of the Covid-19 pandemic in 2020. Analysts cite a decline in production from the chemical and pharmaceutical sectors as the leading driver behind this contraction. This drop-off is especially attributed to recent changes in international trade, spurred by newly imposed US tariffs.
Rising Prices for American Consumers
With the trade war here to stay, it’s American consumers who are getting hit. They’re now experiencing rapid inflation on many other goods due to much higher tariffs. Common import taxes have jumped as much as 70%. This jump is an early sign that consumers should soon expect a broader wave of steeper prices across almost every industry.
Continuing tariff negotiations and adjustments, experts warn, will continue to shape market dynamics. This unsustainable policy choice would add even more economic pressure at home and abroad.
