This week, the ethanol industry has already been signaling distress due to the pandemic. However, today talks between the U.S. and Brazil have deteriorated as well, resulting in a 20 percent import tariff for the U.S.
Since May, U.S. exports to Brazil have fallen to less than 4 million gallons. Over the same time period, Brazil has exported nearly 96 million gallons of fuel ethanol to the United States.
The U.S. Grains Council, Growth Energy, the Renewable Fuels Association and the National Corn Growers Association issued the following statement in response to the Brazilian government’s decision to let the current tariff rate quota (TRQ) expire, replacing it with a 20 percent tariff on all imports of U.S. ethanol:
“Brazil’s decision to impose a 20 percent tariff on all U.S. ethanol imports is devastating for the U.S. ethanol industry, the future of cooperation and coordination between our nations. Not only does this decision risk destroying the great progress our two nations have made as global leaders in ethanol production, it marks a dramatic turn in our bilateral trade relationship.
“Today, Brazilian ethanol receives unfettered access into the U.S. market, while U.S. producers are denied reciprocal market access due to a restrictive import tariff designed solely to make U.S. product less competitive. This unjust imbalance must be addressed. We urge the incoming Biden Administration to respond with strength, leveraging various U.S. government tools and authorities to make it clear that protectionist barriers are unacceptable. However, it seems clear from today’s decision that Brazil is more focused on keeping US ethanol out of Brazil than true two-way trade.
“Through repeated dialogue with local industry and government, the U.S. ethanol industry actively sought to illustrate the negative impacts of increased tariffs on Brazilian consumers and the Brazilian government’s own decarbonization goals. However, it seems Brazil is more focused on taxing imports to protect their national industry than reducing carbon emissions and developing a global industry.”