While no official announcement from Brazil has been made, the deadline for Brazil to extend the small, tariff-free quota for U.S. ethanol has passed, and Brazil has also not readopted its former position that ethanol trade between the two countries should be totally tariff-free. Instead of restoring free trade, Brazil is reverting to a 20 percent tariff on ethanol from the United States. Brazil has been the largest export market for U.S. ethanol.
In response, Iowa Renewable Fuels Association Executive Director Monte Shaw made the following statement:
“The news from Brazil is the worst possible outcome for U.S. ethanol producers and comes at the worst possible time. The hypocrisy of Brazil to preach about free trade for ethanol and to enjoy that right when they send product to the United States, while simultaneously putting a 20 percent barrier on our product is indefensible.
“While the Trump administration cannot control the decisions of the Brazilian government, they can control the decisions of the EPA. With our largest export market now in jeopardy, there is no time to delay in restoring sanity to domestic biofuels markets. President Trump should immediately order the EPA to deny all pending RFS refinery exemption requests for being both unjustifiable and illegal. Farmers and biofuels producers need this action now, not uncertainty until after the election.
“Further, on August 10, President Trump stated his Administration would pursue an equalization of tariffs if Brazil took this step. We look forward to quick action on this front as Brazil continues to flood the California market with duty-free ethanol while at the same time penalizing U.S. producers. Farmers need markets during this difficult time, and President Trump can quickly take these two steps to expand domestic markets for ethanol.”