The U.S. ethanol industry is voicing their concern about trade policies with Brazil. This comes 6 days before Brazil’s tariff free import quota expires. Under the current policy, Brazil allows two hundred million gallons of U.S. ethanol into the country tariff free. Any volume that exceeds that amount is charged with a 20% tariff.
Geoff Cooper, CEO and President of the Renewable Fuels Association says there is growing fear Brazil will go away with the set tariff free amount and charge all U.S. ethanol imports with a 20% tariff. He says this type of action would do damage to the U.S. ethanol industry even more than the current policy set in place. “The current program is already having a negative impact on shipments to Brazil and it could get much worst in a week if Brazil doesn’t do something to right the ship very quickly.”
The Trump Administration has said they would take similar action on Brazil’s products coming to the U.S. if action is not taken on Brazil’s end. Cooper says this is not something that would benefit the ethanol industry but rather makes the situation more stressful, saying what would be ideal is to get back to the relationship the U.S. had with Brazil between 2012 and late 2017.