Ethanol, Feedstock Groups Implore USTR to Levy Reciprocal Tariffs on Brazil
Groups representing the ethanol and feedstock industries told the U.S. Office of the Trade Representative (USTR) this week that it should move forward with levying a set of reciprocal tariffs on Brazilian goods including ethanol, after the agency said last month that it found the South American nation had engaged in discriminatory trade practices against the U.S.
And while both ethanol groups recommended a 25% tariff on Brazilian ethanol in response to those practices, Mark Wilson, chairman of the U.S. Grains and BioProducts Council, asked the agency to first “pragmatically address” the issue by trying to negotiate for the permanent removal of Brazil’s 18% rate on U.S. ethanol imports.
Should the Brazilian government hold steady on that rate, Wilson then recommended a 25% duty in response.
The two-day hearing comes after USTR issued its findings on an investigation into Brazilian trade practices on June 2, which came with the recommendation that the U.S. government levy 25% tariffs on a variety of Brazilian goods.
The agency said in its report that the wide-ranging investigation found the Brazilian government had utilized trade practices that were “unreasonable or discriminatory” and thus restricted U.S. commerce.
USTR has been investigating Brazil’s trade practices since July 2025 due to a memo President Trump issued earlier that year.
In that memo, the president decried the tariff dynamic on a variety of products, including ethanol, noting that the U.S. tariff on the biofuel “is a mere 2.5%,” while imports of Brazilian ethanol to the states amounted to $200 million in 2024.
Meanwhile, domestic ethanol sent into the South American nation fell short at only $52 million in value by year’s end.
The Brazilian government has placed duties ranging from 16% to 20% on imports of American ethanol since 2017, with the rate set most recently at 18% in early 2024. The U.S., meanwhile, has applied a rate of 1.9% to 2.5% on Brazilian ethanol imports for years.
Edward Hubbard, general counsel and vice president of government affairs for the Renewable Fuels Association (RFA), said the group agreed with the USTR’s finding and strongly supports reciprocal duties “as a permissible and appropriately-sized remedy.”
And Chris Bliley, senior vice president of regulatory affairs for Growth Energy, said the group believes, “Brazil’s actions have led to a series of events that have created a significant, irreparable contraction of U.S. ethanol export potential to Brazil despite the country’s increasing blend rates.”
Given the scale of that situation, Bliley noted that a series of reciprocal tariffs “will not rectify Brazil’s unfair actions bilaterally… nor will the tariffs remove the structural international barriers that have been imposed on U.S. ethanol because of Brazil’s actions and its false messaging.”
On top of imposing the 25% tariff laid out in the USTR’s final determination last month, Bliley also recommended a series of actions the administration could take to level the playing field with Brazil.
Among those, he asked the USTR to review the access that Brazilian producers have to the EPA’s Renewable Fuel Standard (RFS) program, noting the lack of “real, equitable, meaningful, and fair access” for U.S. producers to participate in Brazil’s RenovaBio program in turn. That program was first implemented in 2020, with a goal of reaching 5 billion gal in new biofuels demand by 2030.
Wilson joined Bliley in that sentiment in his testimony, noting that the program’s approval of just one U.S. ethanol plant “demonstrates continued, limited access to the carbon credit market inside Brazil.”
And that sole plant’s access to RenovaBio is hardly robust, Bliley noted, as “only less than one percent (0.87 percent) of all ethanol produced from [the one U.S. facility approved under the program] is eligible to participate…”
Hubbard also noted that the RenovaBio program places “burdensome restrictions” on U.S. producers hoping to participate.
Those restrictions, Hubbard said in his testimony, include a “flawed” lifecycle assessment for corn, “inequitable land use traceability standards, and extensive and unworkable data requirements” for American producers.
“By limiting access to RenovaBio certification, U.S. ethanol exports to Brazil are severely disadvantaged and are losing competitiveness against domestic product,” Hubbard said.
Hubbard went on to note that the 7% gap between the current Brazilian duties and the proposal by the USTR “is reasonably close in value…”
“In addition, the additional harm to the U.S. ethanol industry resulting from discriminatory implementation of the RenovaBio program undoubtedly justifies a slightly higher tariff rate on Brazilian ethanol than is imposed by Brazil on U.S. ethanol imports,” Hubbard said.
The USTR is expected to make a final determination on the duties by July 15.