Brazil Imposes 20% Tariff on U.S. Ethanol Imports

Brazil U.S. Ethanol Imports

Future U.S. ethanol exports to Brazil will face levies of 20 percent due to the expiration of a tariff-rate quota (TRQ).

The TRQ initially expired on Aug. 31 but received a 90-day renewal starting on Sept. 11. It allowed around 200 million gallons of U.S. ethanol to enter Brazil without facing tariffs.

The 90-day window gave the two countries more time to negotiate a permanent agreement.

Tariff Background

Since May, the U.S. exported fewer than four million gallons of ethanol to Brazil. In comparison, Brazil exported almost 100 million gallons of ethanol to the U.S.

Brazil is a member of the Mercosur trading bloc with neighbors Argentina, Paraguay and Uruguay. While trade between those countries is free, goods coming from outside the trading bloc are subject to tariffs.

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