Brazil seeks more tax-exempt sugar exports to US
Brazil is seeking to boost tax-free sugar exports to the U.S. amid potential ethanol tariff hikes. Currently, 147,000 metric tons enter duty-free, while extra shipments face an 80% tax. Talks between officials have begun, with Brazil also aiming to expand U.S. meat exports. Meanwhile, Brazil’s corn ethanol production is set to nearly double by 2032.
Brazil will pitch boosting tax-free sugar exports to the United States in talks in Washington, two sources familiar with the matter told Reuters, as the South American country aims to protect the sector amid possible U.S. ethanol tariff increases.
Brazil’s sugar industry has historically sought to increase the quota of tax-free sugar exports to the United States without success. The renewal of existing tax-exempt quotas is also not guaranteed.
These sugar trade discussions have become even more urgent as Brazil faces potential challenges on another front of its agricultural trade with the U.S. – ethanol.
In February, shortly after Donald Trump took office, the White House mentioned Brazilian ethanol as a possible target while announcing reciprocal tariffs against countries that tax U.S. goods.
The potential tariff on ethanol, a renewable fuel made in Brazil mostly from sugarcane, has not yet been implemented but could be included in a new package of taxes that the U.S. government is promising to reveal on April 2.
Currently, 147,000 metric tons of Brazilian sugar can be exported to the U.S. without incurring import taxes. Exports above that figure pay an average of around 80% per ton tax.
Last year, 1.1 million tons of Brazilian sugar were sent to the U.S., according to Brazilian government data.
According to sources, increasing the tax-free quota would allow Brazilian producers to increase sugar production in the event of a possible fall in demand for ethanol if tariffs are implemented.
Initial meetings to discuss possible tariffs were held last week between Brazil’s Vice President Geraldo Alckmin and U.S. Secretary of Commerce Howard Lutnick, the sources said, followed by a subsequent meeting between Brazil’s Foreign Minister Mauro Vieira and U.S. Trade Representative Jamieson Greer.
During those talks, officials agreed that technical groups should begin negotiations on tariff issues, the sources said, adding that Brazil’s government expects to include new products in upcoming talks.
The focus on U.S. sugar exports comes as Brazil’s corn ethanol industry is seeing rapid expansion.
Brazil’s annual corn ethanol production is expected to nearly double to around 16 billion liters by 2032, investment bank Citi said in a note published on Tuesday.
Attempts will also be made to increase a separate U.S. meat export quota, one of the sources said.
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Source : Bilyonaryo
