Brazil Tariff Exempts Coffee, Hits Footwear at 25%

Every headline running this week groups coffee, footwear, and ethanol together as if Brazil's new 25% tariff hits all three the same way. It doesn't. The US Trade Representative's final Section 301 notice, filed July 15, 2026 and effective July 22, 2026, explicitly exempts coffee and orange juice while taxing footwear, ethanol, sugar, furniture, and machinery at the full 25%. That distinction matters because if you import from Brazil and assume your product is covered just because "Brazil tariff" is in the headline, you'll either panic over a bill you don't owe or miss one you do. Here's what actually changed, what's next if you're exposed, and what to watch on the exemption list this week.

This is worth the two minutes it takes to read even if you don't source directly from Brazil, because the "the whole category got hit" assumption is exactly how landed-cost surprises happen. Below is what the primary filing actually says, why coffee got a pass and footwear didn't, and what changes if you're on the wrong side of the exemption line. For the broader picture of how tariff exposure is showing up across categories right now, see our tariff exposure index for DTC brands.

What happened

On July 15, 2026, USTR filed a Federal Register notice imposing a 25% Section 301 tariff on a defined list of goods from Brazil, effective 12:01am ET on July 22, 2026. USTR's stated rationale is not trade deficit reduction (the US actually runs a goods-trade surplus with Brazil, $14.4 billion in 2025, up 112.8% year over year) but six enumerated "unreasonable or discriminatory" practices: digital trade and electronic-payments restrictions, preferential-tariff treatment for other partners, gaps in anti-corruption enforcement, weak IP protection, restricted ethanol market access, and illegal deforestation.

The notice explicitly exempts coffee, including unflavored instant coffee (added specifically in the final version), along with orange juice, beef, seafood, several fruit and vegetable categories, pharmaceuticals, aluminum hydroxide, and organic honey. Any good already subject to separate Section 232 duties is also excluded, since the action does not stack tariffs. Footwear, ethanol, sugar, furniture, and machinery are named as tariffed at the full 25%, with no carve-out.

Category	Brazil share of US imports (CY2025)	Tariff status (July 22, 2026)
Frozen orange juice	69.1%	Exempt
Fuel ethanol	48.3%	Tariffed, 25%
Coffee, all forms	19.6% (all coffee); ~33% for green coffee specifically	Exempt, including instant coffee
Raw hides and leather	12.7%	Not confirmed in the exemption or tariffed lists we could verify; assume tariffed pending your own HTS-code check
Sugar	Not pulled for this analysis	Tariffed, 25%
Finished footwear	0.8%	Tariffed, 25%
Furniture	Not pulled for this analysis	Tariffed, 25%
Beef	Not pulled for this analysis	Exempt

Notice the pattern: the two largest Brazil-import-share categories on this list, orange juice and coffee, are exempt. The smallest, footwear at under 1% of import dollars, is fully tariffed. Import share and tariff status are not correlated here, which is exactly why you cannot infer your product's status from a category headline.

How we got here: three acts in 18 months

This is not the first Brazil tariff scare, and treating it as a standalone event misses the pattern operators should actually be tracking.

Act I, July 2025. A 50% tariff on all Brazilian imports was threatened under IEEPA authority, tied to a separate political dispute, effective August 1, 2025. Coffee was covered under this earlier action, and prices moved on it: Keurig Dr Pepper faced a Senate inquiry after coffee prices rose roughly 18.4% year over year during this round.

Act II, November 2025. Executive Order 14361 narrowed the scope of the original action.

Act III, June to July 2026. The current, narrower, statutorily-grounded Section 301 action replaces the earlier threat entirely, landing at 25% with a longer exemption list, effective July 22, 2026.

The operator mistake we keep seeing is conflating these three. The Steve Madden 10%-cost-absorption figure and the Keurig Dr Pepper coffee-price jump both trace back to Act I, the 50% IEEPA action, not the coffee-exempt action that takes effect this week. If you're modeling your current exposure off a stat from mid-2025, you're modeling the wrong tariff.

Coffee: exempt from the tariff, but not from Brazilian weather

Coffee getting a carve-out does not mean coffee brands are done managing cost pressure from Brazil. It means the pressure they're feeling has a different cause.

Global arabica prices ran from about $2.04 a pound in January 2024 to a peak of $4.10 in February 2025, driven by Brazilian drought and frost, then cooled to $3.15 by May 2026, still 55% above where they started. That's a weather story, not a trade-policy story, and it predates this tariff by two years.

The margin pressure shows up in public filings. Coffee Holding Co., a small-cap single-country roaster, saw gross margin compress from 20.4% in FY2024 to 16.0% in FY2025 (fiscal year ended October 2025), purely from rising green coffee costs. No tariff was involved. On the other side, JDE Peet's, which owns Peet's and Jacobs, told Reuters in July 2025 it expects "minimal direct impact" from tariff actions because under 30% of its beans come from Brazil, and its shares rose 11% on that news.

When we've talked to founders about country-specific cost exposure, the first question is never "should I raise prices." It's "how much of my COGS actually comes from that country, and can I get that number by SKU." One operator was asked directly how much of their cost base traced to a specific origin country and could pull the answer by SKU within minutes, which is exactly the exercise a coffee or footwear brand needs to run before reacting to a headline. The lesson transfers directly here: coffee brands still need to know their green-bean exposure to Brazilian weather cycles, tariff or no tariff.

Footwear: the tariff didn't just add cost, it closed a door

Footwear's story is different in shape from coffee's. It's not a today's-landed-cost hit for most brands; it's a sourcing-strategy door slamming shut.

Footwear is 99% imported into the US, historically about 85% of it from China. Brazil has been a small but strategically important diversification option for brands trying to reduce China concentration, and this tariff forecloses that option specifically, even though Brazil supplies well under 1% of US footwear import dollars today.

Two named companies show the range of exposure. Steve Madden stated on its August 2025 earnings call, under the earlier 50% IEEPA action, that it had paused a planned shift of production to Brazil once the threat became real, and disclosed it was absorbing roughly 10% of tariff cost while implementing about 10% average price increases. Its posture under the current, narrower 25% action was not disclosed in available filings as of this writing, so treat that figure as context from a different, earlier action, not a live number. Alpargatas, the parent of Havaianas, is more directly exposed right now: it shipped 22.2 million of its 226.6 million total pairs into the US in 2024, its largest export market outside Brazil itself, and now faces the 25% directly on that volume with no coffee-style carve-out.

The pattern to watch is never uniform exposure across a brand's SKU mix. One country's rate moving from 0% to 10% can hit a "pretty significant" share of COGS for one product line while a different sourcing country for the same brand barely moves. That's exactly the asymmetry this Brazil action creates: coffee brands exempt, footwear brands exposed, and the difference has nothing to do with how big either category's headline looked.

Ethanol, sugar, furniture, machinery: the quieter tariffed categories

These get less coverage than coffee or footwear but are real, full-25%, no-exemption categories under the final notice.

Ethanol is the one most directly tied to a USTR-stated rationale (restricted market access for US ethanol exports into Brazil), and Brazil supplies close to half of US fuel-ethanol imports. Its CPG relevance is narrow, mostly industrial and fuel use, with some relevance to fragrance, sanitizer, and cleaning-product formulations that use it as a direct input. Don't oversell it as a mainstream CPG cost line, but if you're in one of those categories, check your formulation's sourcing.

Sugar, furniture, and machinery are named as tariffed at the full rate. If any of these sits in your COGS or capex, particularly Brazilian cane sugar in a formulated product, or Brazilian machinery in a manufacturing line, this is a straightforward 25% landed-cost increase on that specific input, effective July 22, 2026.

What to do this week

Three moves, in order.

Check your specific HTS code, not the category headline. The exempt-versus-tariffed split in this action does not track intuitively with import share or category size. Coffee and orange juice, the two biggest Brazil-import categories on this list, are exempt. Footwear, one of the smallest, is fully tariffed. Pull your own products' HTS codes and check them against the USTR annex directly rather than assuming status from a news summary, including this one.

Model the 25% on whatever is actually non-exempt. For anything confirmed tariffed, the founders we talk to typically walk through three scenarios before the effective date, not after: full pass-through to the customer, a 50/50 split, or full absorption against margin. Run all three against your actual COGS and demand elasticity before July 22, not as a reaction after the first invoice lands higher.

Revisit any Brazil-sourcing pivot you had planned for footwear or another tariffed category. If you'd started or were considering a shift to Brazil as a China-tariff workaround, specifically for footwear, that plan no longer works the way it did six months ago. For the wider view of how sourcing decisions are shifting across categories under tariff pressure, see our look at how footwear brands are adjusting to import tariffs. And if you need someone to actually run the pass-through-versus-absorb math against your P&L before the effective date, that's the kind of modeling a fractional CFO does in a single working session, not a multi-week project.

What we're watching next

USTR has room to amend the exemption list before or after the July 22 effective date, and a separate forced-labor enforcement probe could add further duties on top of the 25% on a timeline still to be announced. We'll update this post if the exemption list changes or if a second action stacks on top of this one.

On the coffee side, the number to watch is not tariff-related: it's whether Brazilian growing conditions stabilize enough to bring arabica prices back toward their January 2024 level, or whether another weather event keeps the 55% premium in place through the next harvest.

Sources and methodology

USTR Federal Register notice. The tariff rate, effective date, and exemption list are drawn from USTR's final Section 301 action notice against Brazil, filed July 15, 2026 (document here), corroborated same-day by Supply Chain Dive's reporting on the filing and by wire coverage of the same notice.

US Census Bureau international trade data. Brazil's share of US imports by category (orange juice, coffee, ethanol, footwear, hides) comes from the Census Bureau's HS-code import timeseries for calendar year 2025, imports-for-consumption basis.

BLS and FRED price series. Global arabica coffee prices are from FRED's Global Price of Coffee, Other Mild Arabica series. Coffee and tea manufacturing cost trends draw on BLS Producer Price Index and Import Price Index series for the same category.

SEC EDGAR filings. Coffee Holding Co.'s gross margin figures come from its FY2025 10-K, filed January 28, 2026, available on SEC EDGAR. Genesco's operating margin figures for its footwear brands group come from its most recent public filings; tariffs are cited among multiple factors, not isolated to Brazil specifically.

Company statements. Steve Madden's cost-absorption and pricing figures are from its August 2025 earnings call, made under the earlier 50% IEEPA action, not the current one. Alpargatas' US shipment volume is from its 2024 annual disclosures. JDE Peet's "minimal impact" comment is from Reuters reporting, July 2025.

Limitations. The exempt-versus-tariffed status of raw hides and leather (HS code 41) was not confirmed on either list in the primary and secondary coverage we could access; we've flagged it rather than asserted a status. Sugar and furniture Brazil-import-share dollar figures were not pulled for this analysis; we confirmed tariff status but not size of exposure for those two categories. Steve Madden's disclosed absorption figure predates the current action and should not be read as a live number under the 25% Section 301 tariff.

Update cadence. This is a news-reaction post tied to a specific regulatory action. We'll revise it if USTR amends the exemption list, if the pending forced-labor probe adds a further duty, or once Q3 2026 company filings disclose actual cost impact under this specific action.

Frequently asked questions

is coffee actually exempt from the brazil tariff?

Yes. USTR's final Section 301 notice, filed July 15, 2026, explicitly exempts coffee, including unflavored instant coffee, which was added specifically in the final version. Brazil supplies close to a third of US green coffee imports and there is no origin that can replace that volume fast, which is the substitution argument the coffee industry made at USTR's public hearing in July 2026.

does the 25% brazil tariff apply to orange juice?

No. Frozen orange juice is on the exempt list, which matters because Brazil supplies roughly 69% of US orange juice imports, by far the largest Brazil-import-share category in this action. It is exempt for the same reason coffee is: no fast substitute at that volume.

why is footwear tariffed but coffee isn't?

Substitution and industry pressure, mostly. Coffee and orange juice buyers had no fast alternative source and lobbied hard for a carve-out. Footwear does not have the same constraint. Brazil supplies under 1% of US footwear import dollars today, so USTR had no equivalent supply-shock argument to spare it, even though footwear brands were starting to use Brazil as a sourcing alternative to China.

when does the brazil tariff actually take effect?

12:01am ET on July 22, 2026, per the Federal Register notice filed July 15, 2026.

is this the same as the 50% brazil tariff from 2025?

No, and mixing them up is the most common mistake right now. In July 2025, a 50% tariff was threatened under IEEPA authority tied to a separate political dispute. That was narrowed by an executive order in November 2025. The current action is a different, statutorily-grounded Section 301 tariff at 25%, with a longer exemption list, effective July 22, 2026. Coffee prices that jumped in the 2025 round predate and are separate from this coffee-exempt action.

how much of us footwear actually comes from brazil?

Well under 1% of US footwear import dollars, against roughly 85% historically from China. Brazil was a small but strategically important diversification option for brands moving off China. This tariff closes that door for footwear specifically, which makes it more of a forward-looking sourcing story than a today's-landed-cost story for most footwear brands.

what happened to steve madden's plan to source from brazil?

Steve Madden had publicly stated, on its August 2025 earnings call, that it was shifting some production to Brazil as a China-tariff workaround. It paused that shift once the tariff threat became real. Its specific posture toward the current 25% Section 301 action had not been disclosed in filings as of this writing, so treat the 10% cost-absorption figure from that call as context from the earlier, separate 50% action, not a live number under this one.

what should i do this week if i'm exposed to this tariff?

Check your specific HTS code against the USTR exemption list rather than assuming your status from the category name alone. Then run a SKU-level landed-cost pull for anything sourced from Brazil, model the 25% on what is actually non-exempt, and decide before July 22 whether you pass it through, split it with the customer, or absorb it. If you were planning a Brazil-sourcing pivot for footwear specifically, that plan needs revisiting now.