Brazil Slaps Tariff on U.S. Ethanol

The Brazilian Agriculture Minister announced on Wednesday that the country’s Chamber on Foreign Trade approved a recommendation to impose a 20 percent tariff on U.S. ethanol imports after a 600 million liter tariff rate quota. Brazilian media are reporting the tariff will be in effect for two years. This will make it much more difficult for U.S. ethanol to access a large and growing market. The U.S. Grains Council, Renewable Fuels Association, and Growth Energy issued a joint statement saying they were disappointed and discouraged to see the ruling in Brazil. The statement says, “Given the tremendous volume of information we provided to Brazil that demonstrated how misguided a tariff would be, it seems politics prevailed today and Brazilian consumers lost.” They say imposing a tariff on U.S. ethanol will only hurt Brazil’s consumers by driving up costs when they fill up at the pump. The action also goes against one of Brazil’s own longstanding beliefs that tariffs are inappropriate and will effectively close off an open and bilateral trade relationship that benefits all parties involved. The groups will work through all of the channels available to encourage that this idea is reversed immediately.


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