Shoppers in Rio de Janeiro have recently been greeted by a rare bit of good news: the cost of everyday staples like coffee and meat is dropping. "Finally, some good news in these difficult times," exclaimed Julienne Freitas as she spoke with DW at a supermarket on Avenida Rua Bolivar. Her relief is no anomaly. According to a recent survey from Brazil’s Inter-Union Department of Statistics and Socio-Economic Studies (DIEESE), food prices fell in 24 of Brazil’s 27 regional state capitals in August 2025 compared to the previous month. Tomatoes, rice, meat, and coffee—all essentials—became noticeably cheaper.
But what’s really driving these falling prices? The answer, it turns out, is a complex mix of agricultural cycles, international politics, and the ripple effects of a global tariff war that’s left businesses and governments scrambling to adapt.
Leandro Dias, from the agricultural commodities platform AgroDeri in São Paulo, explained to DW that natural cycles play a role. "Coffee had a strong harvest, which increased supply and pushed down prices. With beef, the livestock cycle is in a phase with plenty of cattle ready for fattening, which the domestic market is now feeling." Yet, Dias also pointed to something less natural: a wave of tariffs imposed by the United States.
Earlier in 2025, President Donald Trump slapped a 50% tariff on most Brazilian goods. The move, part of a broader set of punitive measures, was tied to the political fallout from the trial and sentencing of former Brazilian President Jair Bolsonaro. Brazil’s Supreme Court handed Bolsonaro a 27-year prison sentence for attempting a coup, a verdict that Washington criticized as suppressing opposition and free expression. In response, the U.S. government imposed the hefty tariffs, a move decried by Brazil’s current president, Luiz Inácio Lula da Silva, as unfair—especially given that the U.S. already runs a trade surplus with Brazil.
The numbers back up Lula’s frustration. Between January and July 2025, Brazilian exports to the U.S. hit $23.7 billion, the highest ever for that period. Imports from the U.S. into Brazil climbed 12.6% to $26 billion, pushing the American trade surplus with Brazil to $2.3 billion. But with the new tariffs in place, Brazilian producers who once relied on the U.S. market are now turning inward, flooding the domestic market with goods that might otherwise have been shipped abroad.
Economist Douglas Eustaquio of Grupo Boticário, one of Brazil’s largest cosmetics firms, told DW that tariffs are reshaping supply and demand at home. "Products that were partly or entirely intended for the US market are now staying in Brazil and supplying the domestic market," he explained. While beef prices are adjusting more slowly, they too are trending downward.
This pattern isn’t unique to Brazil. In Mexico, food prices are also dropping, especially for tomatoes. Javier Reyes Escamilla, president of the Livestock Association of the Mid-North Region of the State of Mexico, told Milenio that high production is leading northern producers to sell domestically, rather than exporting to the U.S. The result? Lower prices for Mexican consumers, at least for now.
Yet, as economist Dirlene Silva warned DW, the longer-term outlook isn’t so rosy. "If producers lose access to an important market like the American one, they no longer have an incentive to invest. That means less technology, lower productivity, and even losses in quality." She cautioned that production could eventually shrink, sending prices back up—this time hurting local consumers as well.
Meanwhile, businesses worldwide are facing what Forbes dubbed a "tariff tsunami." President Trump’s tariffs haven’t just affected Latin American exporters; they’ve sent shockwaves through global supply chains. Retailers and manufacturers are being forced to rethink their supply chains, searching for new ways to get products to consumers without massive price hikes or delays.
One workaround that’s gaining traction is the business-to-business-to-consumer (B2B2C) model, sometimes called "tariff hacking," according to CNBC. Here’s how it works: a company routes its products through a subsidiary in a third country with lower tariffs before shipping them to the U.S. For example, a Chinese company facing a 50% tariff might ship goods to its subsidiary in Vietnam, where the tariff is only 10%. The Vietnamese entity then ships the product to the U.S., saving 40% in tariff costs. As James Mohs, associate professor at the University of New Haven, explained to Fast Company, "This is not new. It’s been going on forever." But he also cautioned, "Right now, it’s a short-term solution. Hard to say if it’s a long-term solution because this tariff war is in such a state of flux right now." The U.S. government could, at any moment, decide to base tariffs on the product’s original country of origin, upending these strategies overnight.
The uncertainty isn’t limited to food or consumer goods. Energy markets are feeling the heat, too. On September 19, 2025, oil prices dropped as traders responded to a meeting between President Trump and Chinese President Xi Jinping. The two leaders met on the sidelines of the Asia-Pacific Economic Cooperation summit, and their amicable exchange reduced expectations that the U.S. would impose new secondary tariffs on China for its purchases of Russian crude. West Texas Intermediate crude fell 1.4% to just below $63 a barrel as the October contract’s expiry loomed, according to Rigzone.
Rebecca Babin, a senior energy trader at CIBC Private Wealth Group, told Rigzone, "The fact that Trump did not highlight Chinese purchases of Russian crude following his meeting with Xi has lowered the perceived probability of US secondary sanctions." Meanwhile, India continues to buy Russian oil, and the European Union’s latest package didn’t appear strong enough to prompt further U.S. action. Despite repeated Ukrainian strikes on Russian energy infrastructure, most experts still expect the oil market to tip toward a surplus, keeping prices in check for now. Edward Bell, acting group head of research and chief economist at Emirates NBD, noted, "Attacks on Russian oil infrastructure are giving some upside support to prices, but it’s still tempered by a market looking for a surplus in the months ahead."
Adding to the uncertainty, the U.S. central bank recently cut interest rates by 25 basis points, a move that typically boosts energy demand. But with policymakers warning of mounting weakness in the labor market, sentiment remains cautious. The U.S. dollar also strengthened on September 19, making dollar-priced commodities like oil less attractive to global buyers.
In the end, falling food prices in Brazil and Mexico may feel like a welcome break for consumers, but they’re just one symptom of a global system in flux. Tariffs, political maneuvering, and shifting supply chains are rewriting the rules of global commerce. Whether these changes will bring lasting relief or new challenges remains to be seen, but for now, shoppers like Julienne Freitas are savoring every cent saved at the checkout.
