- US President Trump removed the 40% tariff on Brazilian agricultural imports to reduce US food inflation
- The tariff rollback benefits Brazil's market share, increasing competition with Indian agricultural exports
- Brazil supplies about one-third of US coffee imports and gains stronger price advantage after tariff cut
US President Donald Trump has removed the additional 40% tariff on a range of Brazilian agricultural imports including beef, coffee, cocoa and fruit, in an effort to reduce food-price inflation in the United States.
The reversal was issued through an executive order on Nov. 20 and allows refunds on duties collected since Nov. 13, Reuters reported.
The decision strengthens Brazil's price advantage in the US market at a time when India is attempting to expand its agricultural exports. Both countries compete in categories such as coffee, processed food and fruit-based products, and the tariff cut could increase competitive pressure on Indian shipments.
Brazil supplies around one-third of US coffee imports, giving it a dominant position even before the tariff rollback, Reuters reported. The share of Brazilian agricultural shipments exposed to the maximum 50% duty has now fallen to about 22% from 36% after the latest cuts, according to Reuters.
Will India Lose Ground?
India's agricultural exports to the United States had already fallen nearly 12% year-on-year in September after earlier tariff increases, Reuters reported. India has a limited presence in product lines such as fruit juices, bananas, melons and citrus where Brazil is a major supplier, reducing India's ability to capture gains from the tariff relaxation, Reuters said.
The United States has removed tariffs on more than two hundred food items and Indian industry stakeholders expect some benefit for categories including tea, coffee and spices. Exporters believe India could gain limited relief from the wider rollback, but competition from Brazil may offset some of the advantage, the Times of India reported.
Status Of India–US Trade Discussions
India continues trade negotiations with Washington as it seeks more predictable access for farm goods. New Delhi views the recent US tariff changes as a possible signal of openness to broader settlement, Reuters said. Agriculture and dairy remain sensitive areas for India, and the sectors are seen as red lines in the discussions, Reuters reported.
Officials expect that a potential agreement could bring down US tariff rates on Indian goods to around 15-16% from current levels, Reuters reported. Any final terms will determine how effectively India can maintain its presence in the US food market in the face of stronger Brazilian competition.
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