Context:

Johanna Foods, a major US importer of orange juice, is suing the Trump administration over proposed tariffs on Brazilian goods, which could significantly increase costs for consumers. The company claims that a 50% tariff would lead to a $70 million annual cost increase, forcing a 20-25% rise in prices at major retailers and potentially impacting its workforce. Brazil, being the largest producer of orange juice, supplies a substantial portion of the US market, hence the tariff would disrupt the supply chain significantly. The lawsuit argues that the tariffs lack a formal legal basis and are not justified under the International Emergency Economic Powers Act. The tariffs are part of a broader strategy to influence foreign policy, with Trump using similar tactics with other countries in the past.

Dive Deeper:

• Johanna Foods, along with its subsidiary Johanna Beverage Company, provides 75% of private label not-from-concentrate orange juice in the US, sourcing entirely from Brazil. The tariffs threaten to disrupt this supply chain significantly as Brazil accounts for 75% of global orange juice exports.

• The proposed tariffs are linked to President Trump's dissatisfaction with Brazil's domestic legal proceedings against former President Jair Bolsonaro, demonstrating a pattern of using tariffs to influence foreign domestic policies.

• The potential 50% tariffs would lead to an annual cost increase of $68 million for Johanna Foods, surpassing any single year's profits in the company's 30-year history, and necessitating a consumer price hike of up to 25%.

• The company argues that the tariff would create an unsustainable financial burden, potentially jeopardizing its 685-person workforce and forcing significant price increases for consumers.

• Johanna Foods contends that the tariffs lack a formal executive order and legal justification, and it seeks a court declaration that these tariffs are unconstitutional under the International Emergency Economic Powers Act.

• The Trump administration has not formalized the tariffs yet, but similar threats have been made to other countries, with a provision for no tariffs if production is moved to the US, despite the US running a trade surplus with Brazil.

• The lawsuit is part of a broader pattern of legal challenges against the Trump administration's tariff policies, with previous cases resulting in a US trade court ruling that found Trump exceeded his authority, although a federal appeals court allowed the tariffs to proceed pending further review.