The Brazilian government’s tariff rate quota that placed a 20% tariff on America ethanol imports exceeding 198 million gallons expired on Aug. 31 and Brazilian officials are yet to announce plans for the future of the U.S.-Brazil trade relationship. Without further action by the government of Brazil, all U.S. ethanol exports to the country are facing a 20% tariff.
Bloomberg reported earlier this week that Brazilian President Jair Bolsonaro was considering reapplying the tariff in a goodwill gesture to President Trump, but doing so would risk angering the Brazilian ethanol industry.
House Agriculture Committee Chairman Rep. Collin Peterson, D-Minnesota, said, “tariff wars have consequences, and our biofuels producers are seeing that first-hand."
From 2012 to 2017, the Brazilian government had a zero-duty exemption for U.S. ethanol imports to the country. Brazil is a major purchaser of American-made ethanol, importing 332 million gallons of U.S. ethanol worth $493 million in 2019.
Peterson, who is co-chairman of the Congressional Biofuels Caucus, asked the Trump administration to work with Brazil to restore the zero-duty exemption.
"American corn and ethanol producers are struggling to access domestic markets because of the coronavirus and the Environmental Protection Agency's reckless implementation of the Renewable Fuel Standard," he said. "The Trump Administration should continue working with Brazilian officials to restore the duty-free access that was in place from 2012 to 2017."
In August, Peterson and 19 other members of Congress sent a letter to U.S. Trade Representative Robert Lighthizer encouraging him to pressure Brazilian leaders to restore the zero-tariff ethanol trade that once existed between the U.S. and Brazil.