Four US organisations have hit back after Brazil imposed tariffs on ethanol imports into the country.
All US ethanol imports into the South American state now face a 20% tariff following the expiry of a deadline set for December 14. This relates to a Brazilian quota allowing for tariff-free imports of 187,500 cu m of the US product.
The U.S. Grains Council, Growth Energy, the Renewable Fuels Association and the National Corn Growers Association issued a statement in response to the Brazilian government’s decision to let the current tariff rate quota expire - replacing it with a 20% tariff on all imports of U.S. ethanol.
They said: “Brazil’s decision to impose a 20% tariff on all US ethanol imports is devastating for the ethanol industry, the future of cooperation and coordination between our nations. Not only does this decision risk destroying the great progress our two nations have made as global leaders in ethanol production, it marks a dramatic turn in our bilateral trade relationship.
“Today, Brazilian ethanol receives unfettered access into the US market, while US producers are denied reciprocal market access due to a restrictive import tariff designed solely to make US product less competitive. This unjust imbalance must be addressed.
“We urge the incoming Biden Administration to respond with strength, leveraging various US government tools and authorities to make it clear that protectionist barriers are unacceptable. However, it seems clear from today’s decision that Brazil is more focused on keeping US ethanol out of Brazil than true two-way trade.
“Through repeated dialogue with local industry and government, the US ethanol industry actively sought to illustrate the negative impacts of increased tariffs on Brazilian consumers and the Brazilian government’s own decarbonisation goals. However, it seems Brazil is more focused on taxing imports to protect their national industry than reducing carbon emissions and developing a global industry.”
Since May, U.S. exports to Brazil have fallen to less than 4 million gallons. Over the same time period, Brazil has exported nearly 96 million gallons of fuel ethanol to the US. A 20% tariff will only further imbalance trade between the two countries, the organisations argued.
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