Renewable fuels leaders: Brazil ethanol tariff will be ‘devastating’
After the United States and Brazil apparently failed to reach an agreement to avoid Brazil imposing a 20% tariff on ethanol imports, the Renewable Fuels Association, U.S. Grains Council, Growth Energy, and the National Corn Growers Association said Wednesday that the Brazilian government’s decision to let the current tariff rate quota (TRQ) expire, replacing it with a 20% tariff on all imports of U.S. ethanol, “is devastating for the U.S. ethanol industry, the future of cooperation and coordination between our nations.”
“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,” the groups said in a joint news release. “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 U.S. ethanol out of Brazil than true two-way trade.”
Since May, U.S. exports to Brazil have fallen to less than 4 million gallons, the groups said. Over the same time period, Brazil has exported nearly 96 million gallons of fuel ethanol to the United States, and a 20% tariff will only further imbalance trade between the two countries, they added.
American Coalition for Ethanol CEO Brian Jennings said in a separate statement, “We were never big fans of Brazil’s TRQ, but at least it allowed some ethanol into the country tariff-free. While our border remains completely open to imports from Brazil, their tariff virtually closes the door to us. It wasn’t that long ago that Brazil was the top export destination for U.S. ethanol. Now we are experiencing demand destruction at home and abroad. One of the most urgent priorities for USTR nominee Katherine Tai will be to sit down with her Brazilian counterparts to try and negotiate a much better outcome. Sanity must be restored to Brazil’s protectionist policy toward ethanol trade.”
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