Brazil President Luiz Inacio Lula da Silva’s defiant response to Donald Trump’s 50% tariff threat was validated Wednesday — at least in the short term — with markets and businesses breathing a collective sigh of relief at the long list of exemptions to the levies.

Latin America’s biggest economy can weather the shock of a high tariff rate. But American coffee lovers and Brazilian ranchers are likely to feel the pain.

President Luiz Inácio Lula da Silva has signaled a firm stance in response to President Donald Trump’s threat to impose sweeping 50 percent tariffs on Brazilian goods, set to take effect August 1. The tariff announcement explicitly linked to Brazil’s ongoing criminal trial of ex-President Jair Bolsonaro sparked strong pushback from Brasília.