RFA, Growth Energy welcome White House call for action on ethanol tariffs
The Trump Administration is considering reciprocal tariffs on Brazilian ethanol under its “Fair and Reciprocal Plan” to address trade imbalances. The Renewable Fuels Association and Growth Energy support this move, citing Brazil’s 18% tariff on U.S. ethanol versus the U.S. 2.5% tariff on Brazilian ethanol. Industry leaders hope this action restores free and fair ethanol trade.
The Trump Administration has signaled it will consider reciprocal tariffs against Brazilian ethanol as part of its “Fair and Reciprocal Plan” for trade. The Renewable Fuels Association and Growth Energy are welcoming the action.
President Donald Trump on Feb. 13 signed a Presidential Memorandum ordering the development of a comprehensive plan to restore fairness in U.S. trade relationships and counter non-reciprocal trading arrangements. This “Fair and Reciprocal Plan” will seek to correct longstanding imbalances in international trade.
A fact sheet released by the White House offers ethanol as an example of unfair trade, noting the U.S. tariff on ethanol is only 2.5%. Brazil, however, has imposed an 18% tariff on U.S. ethanol. As a results, the U.S. imported more than $200 million in ethanol from Brazil while the U.S exported only $52 million in ethanol to Brazil.
“For almost a decade now, we have spent precious time and resources fighting back against an unfair and unjustified tariff regime imposed by Brazil’s government on U.S. ethanol imports,” said Geoff Cooper, president and CEO of the RFA. “What’s more ironic is that these tariff barriers have been erected against U.S. ethanol imports while our country has openly accepted—and even encouraged and incentivized—ethanol imports from Brazil.
“As the two largest ethanol producers on the planet, we long enjoyed a cooperative free-trade relationship with Brazil involving ethanol, relying on each other when there were shortfalls or disruptions in the U.S. or Brazilian marketplace,” Cooper added. “However, that bilateral cooperation was abandoned by Brazil in 2017, when they instituted a tariff rate quota scheme, and eventually adopted a tariff in 2020. The Brazilian tariff on U.S. ethanol now stands at 18 percent and has virtually eliminated all market access for U.S. ethanol producers. We thank President Trump for taking this action and hope this reciprocal tariff will help encourage a return to free and fair ethanol trade relationship with Brazil.”
“While American biofuel producers have been almost entirely blocked off from the Brazilian market, Brazilian producers have enjoyed unfettered access to the U.S. In some cases, certain policies in the U.S. even incentivize the use of imported Brazilian ethanol instead of ethanol produced here in the U.S.,” said Emily Skor, CEO of Growth Energy. “This runs contrary to putting America first, and is exactly why President Trump is taking steps to address this issue. Thank you, President Trump for taking action and pushing for a level playing field for American ethanol producers.”
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Source : Ethanol Producer Magazine
