Ethanol Blog

A group of 10 United States senators are asking United States Trade Representative Ambassador Robert Lighthizer to take action in response to Brazil's implementation of a 20% tariff on U.S. ethanol imports into Brazil, in a letter to the ambassador on Friday.

On Aug. 23, 2017, Brazil's Chamber of Foreign Trade imposed a two-year tariff-rate quota system for ethanol imports. A 20% tariff will be applied to purchases from the U.S. after a 600-million-liter (158.5 million gallon) quota is met. In 2017 thus far, ethanol exports to Brazil are at 1.17 billion liters (310 million gallons) through July, according to U.S. Census Bureau trade data.

In a letter to Lighthizer, Sens. Charles Grassley, R-Iowa; Joni Ernst, R-Iowa; Deb Fischer, R-Neb.; Joe Donnelly, D-Ind.; Tammy Duckworth, D-Ill.; Al Franken, D-Minn.; Amy Klobuchar, D-Minn.; Debbie Stabenow, D-Mich.; Richard Durbin, D-Ill.; and Ben Sasse, R-Neb., express urgency for the U.S. to engage with the Brazilians.

"We are writing to ask that you directly engage the Brazilian government and quickly work to resolve this issue," the letter said.

"For several years, the U.S. and Brazil have engaged in ethanol trade which signaled the maturing and global nature of the biofuels industry. However, this new action by Brazil's Chamber of Foreign Trade indicates a potential turning point in how ethanol moves between our respective countries. The U.S. renewable fuels industry has invested heavily in ethanol plants, feedstock development and infrastructure over the last several decades to advance the industry.

"Similar investments have been made in many other countries including Brazil. Unfortunately, seemingly arbitrary or protectionist tariffs are threatening to disrupt the growing global market that has developed for ethanol. We look forward to working with you to address the concerns regarding Brazil's actions."

On Sept. 7, officials with the Renewable Fuels Association, Growth Energy and the U.S. Grains Council said in statements there needed to be an "immediate response" to the new tariffs because they threaten more than $750 million in U.S. exports and American jobs.

"The three organizations, which work jointly and with the U.S. Department of Agriculture to develop overseas markets for U.S. ethanol, are imploring the administration to immediately engage their Brazilian counterparts on the future of our relationships with regard to biofuels," the groups said in a news release.

"It is vital that the administration take immediate action and consider all avenues to encourage Brazil to either revoke the TRQ or substantially increase the tariff-free quota level to better reflect the current ethanol market and trade realities.

"Brazil's tactics are the latest step in a troubling global trend towards protectionist tariffs and other actions against the American biofuels industry. As the largest ethanol export market for American producers, the impact of this economic attack is both damaging and thoroughly counterproductive. American jobs, farms, and businesses are at risk; this cannot go unanswered."

Read the letter here: http://bit.ly/…

Todd Neeley can be reached at todd.neeley@dtn.com

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