With a breakdown in negotiations between the U.S. and Brazil, U.S. ethanol producers now face a 20% import tariff when sending their product to Brazil.
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. A 20% tariff will only further imbalance trade between the two countries.
Following the Brazilian government's decision, the U.S. Grains Council, Growth Energy, the Renewable Fuels Association, and the National Corn Growers Association came together and said it was devastating for the U.S. ethanol industry and the future of cooperation and coordination between the two 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," the combined statement said.
“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," the statement continues. "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.
“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.”