Ethanol Blog

LINCOLN, Neb. (DTN) -- The U.S. Trade Representative is set to levy a 25% tariff on Brazilian goods including ethanol, in retaliation for what the USTR has determined was an "unreasonable" burden placed on U.S. ethanol imports to Brazil.

The USTR's proposed actions cover a variety of goods and services in Brazil.

At the core of the U.S. complaint against Brazil is that the country "abandoned bilateral cooperation" on ethanol trade and established non-reciprocal and "unfair" conditions.

In 2010 Brazil suspended its 20% ethanol tariff to facilitate bilateral trade. In 2011, the U.S. reciprocated by allowing the blender tax credit and the 54-cent, per gallon import surcharge to expire. In 2017, Brazil abruptly reversed course and instituted a duty-free tariff rate quota of 600 million liters, with imports above that threshold subject to a 20% tariff.

Since 2023, Brazil has maintained an 18% tariff on ethanol with the ability to change it monthly.

According to a document released by the USTR this week, the agency has attempted to quantify the damage to U.S. ethanol producers.

U.S. exports to Brazil peaked at $762 million in 2018 and dropped to just $96 million in 2025, which is an 87% decline, according to the USTR.

In 2024, U.S. ethanol import market share in Brazil fell to 54% down from nearly 100% in 2018.

The U.S. imported about $203 million worth of ethanol from Brazil in 2024, while exporting just $53 million to Brazil.

After Brazil reimposed tariffs in 2017, U.S. ethanol exports to Canada grew from 326 million gallons to 698 million gallons in 2024. Exports to Brazil that year fell from 430 million gallons to just 28 million gallons, according to the USTR.

On Monday, the USTR opened a comment period on the proposed penalties for Brazil. A public hearing is scheduled for July 6, 2026, and written comments to the agency are due by July 1, 2026.

Geoff Cooper, president and CEO of the Renewable Fuels Association, said on Tuesday that Brazil's lack of movement on U.S. ethanol left the Trump administration with no choice.

"We agree with USTR that Brazil's ethanol trade policies are unreasonable and restrictive, and we support the Trump administration's efforts to level the playing field," Cooper said in a statement.

"The U.S. ethanol industry would prefer to return to days of free and open two-way trade with Brazil. But the Brazilians have instead chosen to enforce punitive tariffs and technical barriers that have resulted in lost market opportunities and financial harm to U.S. producers. Thus, the Trump administration has no choice but to respond in kind."

In August 2025, ethanol interest groups asked the USTR to take retaliatory measures against Brazil after the federal government launched an investigation in July 2025.

Read more on DTN:

"Trump Administration Launches Trade Investigation of Brazil Including Ethanol Tariff Against US Producers," https://www.dtnpf.com/…

"US Ethanol Groups Seek Trade Retaliation Against Brazil Over 18% Tariffs," https://www.dtnpf.com/…

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

Follow him on social platform X @DTNeeley

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