USTR Recommends 25% Tariff on Brazilian Ethanol in Report on Trade Practices
The Office of the U.S. Trade Representative (USTR) issued its findings on an investigation into Brazilian trade practices for a variety of products, including ethanol, on Tuesday, in which the agency said it found the country had utilized methods that are “unreasonable or discriminatory and burden or restrict U.S. commerce…”
In an effort to correct what the agency described as an uneven trade relationship between nations, the USTR recommended a 25% tariff on nearly all Brazilian goods.
The wide-ranging investigation by the USTR has been ongoing since July 2025 and was prompted by a January 2025 memo from President Trump.
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. Over the same period, 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 only a de minimis 1.9% to 2.5% rate on Brazilian ethanol imports for years.
The escalating duties between nations over the past decade err from the mutually beneficial relationship established between 2010 and 2017 – when Brazil suspended its duty on American ethanol in exchange for the expiration of a domestic blender’s tax credit and 54ct/gal import fee in the states.
The current dynamic is sure to embroil further after the USTR’s call for action, as the agency noted that Brazil has ” abandoned bilateral cooperation to promote ethanol trade, choosing instead to establish non-reciprocal and unfair conditions for trade in this critical product, which denies fair and equitable market opportunities for U.S. ethanol producers.”
The Tuesday report comes after the agency heard from a variety of stakeholders on the matter in an August public hearing, where USTR said it received several comments “providing evidence” of the unreasonable and discriminatory trade practices.
News of the determination was applauded on Tuesday afternoon by proponents for the ethanol industry, as Geoff Cooper, president and CEO of the Renewable Fuels Association, said the group agreed with USTR that Brazil’s trade policies for the renewable fuel are “unreasonable and restrictive…”
“The U.S. ethanol industry would prefer to return to days of free and open two-way trade with Brazil,” Cooper said. “But the Brazilians have instead chosen to enforce punitive tariffs and technical barriers that have resulted inlost market opportunities and financial harm to U.S. producers.”
And Emily Skor, CEO of Growth Energy, said: “American ethanol producers have been sounding the alarm on Brazil for years.”
“This is a country that has unfairly used tariff and non-tariff trade measures to severely restrict imports of U.S. ethanol, while enjoying complete and unfettered access to American markets,” Skor said. “We applaud USTR for continuing to press Brazil on the issue of fairness, and we look forward to reviewing the determination in detail and providing further comments to support the ultimate goal of delivering a level playing field for ethanol in the western hemisphere.”
The USTR said it will accept written comments on the report through July 1 and will host a public hearing on July 6.
Reporting by Patrick Newkumet, pnewkumet@opisnet.com; Editing by Bryan Sims, bsims@opisnet.com