Brazil’s Orange Juice Industry Faces Heavy Losses Under U.S. Tariffs

São Paulo – Brazil’s orange juice exporters are bracing for steep financial losses as new U.S. trade tariffs threaten one of the country’s most emblematic agricultural industries. According to CitrusBR, the leading trade association for juice producers, the combined effect of higher tariffs and falling global prices could cost the sector as much as US$536 million (R$2.9 billion) during the 2024/25 harvest season.

The U.S. is Brazil’s largest market for orange juice, and the newly imposed tariffs under the Trump administration represent a serious blow to exporters. CitrusBR projects that direct losses from tariffs alone could reach R$1.54 billion (US$285 million), with additional damage expected from a collapse in international prices linked to a bumper harvest.

Tariffs Hit Both Juice and Byproducts

The U.S. government has levied a 10 percent tariff on imported orange juice, which CitrusBR estimates will cost exporters US$103.6 million (R$566.7 million). An even more damaging measure is the 50 percent tariff on orange juice byproducts such as citrus cells and essential oils, inputs widely used in the beverage and cosmetics industries.

Byproducts generated US$177.8 million (R$973.6 million) in export revenue in the last harvest. These components play a critical role in producing reconstituted orange juice, which accounts for nearly 58 percent of U.S. juice consumption, as well as in flavoring and fragrance manufacturing.

“Many of these products depend on ingredients such as citrus cells – orange segments – and essential oils responsible for aroma, and these inputs are overtaxed by 50 per cent, making operations unviable,” said CitrusBR executive director Ibiapaba Netto. “This could harm the consumer experience, affect American companies, and, consequently, impact the entire Brazilian supply chain.”

A Market Already Under Pressure

While tariffs represent a new challenge, Brazil’s juice producers were already facing headwinds. According to the Fund for Citrus Plant Protection (Fundecitrus), global orange supply has risen by 36 percent compared to the previous harvest. The oversupply has driven down prices on the international market, further eroding exporters’ margins.

When combined with tariff losses, CitrusBR calculates that the sector could forfeit more than US$536 million (R$2.9 billion) in the current cycle.

Impacts Beyond Brazil

The repercussions of U.S. trade measures may ripple through multiple industries. American juice bottlers and beverage companies rely heavily on Brazilian orange derivatives to meet consumer demand. A sudden increase in costs could translate into higher retail prices for U.S. consumers or reduced product availability. The cosmetics sector, which uses essential oils from orange byproducts for perfumes and personal care products, may also face disruptions.

Industry analysts warn that smaller Brazilian producers, already squeezed by declining prices and rising domestic costs, will struggle the most. “Large multinationals might absorb part of the shock, but independent growers and processors could be forced out of the market,” one São Paulo-based trade consultant told BNamericas.

Strategic Sector at Risk

Brazil supplies nearly 70 percent of the world’s orange juice exports, making it a strategic industry for the country’s agribusiness sector. The citrus belt in São Paulo and Minas Gerais employs tens of thousands of workers directly and indirectly. Any contraction in exports could therefore carry social and economic consequences beyond corporate losses.

CitrusBR is urging the Brazilian government to engage in diplomatic talks with Washington to soften the blow of tariffs. The association has also signaled that companies may seek to diversify markets in Europe and Asia to reduce dependency on the U.S.

“Although the sector is relieved to have been included in the exception list, the impacts are significant, especially in a challenging market context like this year’s,” Netto said.

For now, producers are watching closely to see whether demand in the U.S. holds firm despite higher costs—or whether consumers will turn away from a staple breakfast beverage that has long linked Brazilian orchards to American breakfast tables.