That’s a major topic frustrating U.S. corn and ethanol producers, with Brazil maintaining protective tariffs while the U.S. allows tariff-free access for Brazilian ethanol. Details:
Currently, the U.S. does not impose tariffs on Brazilian ethanol imports. Brazilian ethanol can be imported into the U.S. tariff-free. The U.S. market provides free and increasing access to Brazilian ethanol.
As of 2024, Brazil imposes an 18% tariff on U.S. ethanol imports. This tariff was reinstated on Feb. 1, 2023, after a period of suspension. The tariff has fluctuated in recent years:
· Between 2017 and January 2022, Brazil imposed a tariff-rate quota and later a 20% Mercosur common external tariff.
· The tariff was suspended in March 2022 but reimposed in January 2023 at 16%.
· It was then increased to the current 18% rate.
The U.S. ethanol industry views this situation as unfair and imbalanced. U.S. ethanol exports to Brazil have declined significantly due to these tariffs:
· Exports peaked at 499.6 million gallons in 2018.
· In 2023, exports dropped to just 29,779 gallons.
Push for change. U.S. industry groups and lawmakers are pushing for reciprocal market access and the removal of Brazil’s tariffs. The tariff is seen as a protective measure for Brazil’s domestic ethanol industry, but critics argue it increases fuel costs for Brazilian consumers.
Get more market insights and analysis from Pro Farmer. View subscription specials.
