Washington (TDI): President Donald Trump recently announced that the decades-old low tariff rates on ethanol would be terminated. As an illustration of unfair trade policies, the White House cited Brazil’s ethanol tax, which is 18% on US ethanol exports, while the US tariff on Brazilian ethanol is only 2.5%. According to a White House data sheet, Brazil sold more than $200 million of ethanol to the United States in 2024, compared to just $52 million in US exports to Brazil.
On Thursday, Alexandre Silveira, Brazil’s Minister of Mining and Energy, voiced his strong objection to a possible rise in US tariffs on Brazilian ethanol. Silveira highlighted that such a move would be unfair and counterproductive to the long history of negotiations between the two countries, especially regarding the trade of sugar and ethanol.
Furthermore, Minister Silveira stated that the United States would have to lift its import taxes on Brazilian sugar for the measure to be genuinely equitable and reciprocal, as proposed by President Trump. “The proposed US tariff adjustment is unjust,” said Silveira. “The need to enhance Brazilian sugar exports to the United States has not been acknowledged. In addition to undermining international multilateralism, this choice may harm the US economy.” according to Reuters.
Silveira’s remarks highlight the ongoing significance of fair trade policies between the two countries, especially for vital industries such as sugar and ethanol, which are essential to both countries’ economies.
Last week, President Trump also announced plans to implement reciprocal tariffs in addition to the steel and aluminium tariffs. This plan will be in line with the tariffs that the other countries employ on US exports.
“We charge them if they charge us,” Trump stated, highlighting fair trade.
In addition to this, major US trading partners such as Canada, Mexico, Brazil, South Korea, and Vietnam will be significantly affected by the additional tariffs. In the first 11 months of 2024, 79% of all aluminium imports came from Canada, the United States’ top supplier. Canadian authorities have already expressed concerns.
However, the new measures have been acknowledged by the American steel sector. American Iron and Steel Institute’s (AISI) president and CEO, Kevin Dempsey, expressed support for this new measure. Similarly, Trump’s initiative of putting tariffs on Brazilian imported ethanol was also welcomed by the Renewable Fuels Association (RFA).
Although President Trump’s plan does not immediately impact tariffs, it may result in higher rates for significant trading partners by the beginning of April. It could spark talks on reducing trade barriers with numerous countries.
