Brazil Rebuffs US Pressure to Abandon Tariffs on Ethanol Imports
Brazilian Agriculture Minister Carlos Fávaro announced that Brazil will uphold tariffs on US ethanol imports despite strong objections from the Biden administration. Fávaro emphasized the need to protect Brazilian producers, particularly amid intensifying competition with US farmers. US pressure to remove tariffs has prompted discussions, with Fávaro suggesting a potential trade-off: reducing tariffs in exchange for an increase in the US gasoline-blending mandate, which would boost demand for biofuel.
(Bloomberg) — Brazil will maintain tariffs on US ethanol imports despite “tough” complaints from the Biden administration, said Agriculture Minister Carlos Fávaro.
“We cannot risk making things more precarious for Brazilian producers,” Fávaro said during a sugar cane industry conference in Brasilia on Wednesday.
Ethanol is a hot-button issue in major corn-producing states such as Iowa and Illinois as US farmers face increasing competition from the Brazilian agricultural sector. Producers of South American ethanol made from sugar cane and corn want to increase sales to the US, where some renewable aviation fuel plants plan to use the biofuel as a feedstock.
US authorities have been pressuring Brazil to remove the tariffs reinstated by President Luiz Inacio Lula da Silva’s administration. Fávaro said one option may be for Brazil to reduce tariffs in exchange for an increase in the domestic US gasoline-blending mandate. Such a move would increase overall demand for the biofuel, he noted.
“This way we would have a market big enough for everyone,” Fávaro said.
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