President Donald Trump signed a Memorandum Thursday ordering the “development of a comprehensive plan for restoring fairness in U.S. trade relationships and countering non-reciprocal trading arrangements” and that includes Brazilian tariffs on U.S. ethanol.
The White House fact sheet on the plan notes “endless examples where our trading partners do not give the United States reciprocal treatment” and the first example is Brazil.
The U.S. tariff on ethanol is a mere 2.5%. Yet Brazil charges the U.S. ethanol exports a tariff of 18%. As a result, in 2024, the U.S. imported over $200 million in ethanol from Brazil while the U.S. exported only $52 million in ethanol to Brazil.
“And I think the farmers are going to be helped by this very much because product is being dumped into our country and our farmers are getting hurt very badly by the last administration,” said President Trump. “The last administration hated our farmers like at a level that I’ve never seen before. I think our farmers are going to be helped.”
Pres. Trump announces reciprocal tariffs (2:45)Renewable Fuels Association President and CEO Geoff Cooper says the ethanol industry has been fighting Brazil on these tariffs for nearly a decade. “As the two largest ethanol producers on the planet, we long enjoyed a cooperative free-trade relationship with Brazil involving ethanol, relying on each other when there were shortfalls or disruptions in the U.S. or Brazilian marketplace. However, that bilateral cooperation was abandoned by Brazil in 2017, when they instituted a tariff rate quota scheme, and eventually adopted a tariff in 2020,” said Cooper. As a result, U.S. ethanol exports to Brazil went from 489 million gallons in 2018, with a value of $761 million, to just 28 million gallons in 2024, valued at $53 million.
Howard Lutnick, Secretary Nominee for the Department of Commerce, said the plan is for the tariffs to be implemented by April 1. “But remember, if they drop their tariffs, prices for Americans are coming down, our production’s going up and our costs are going down. It’s a two way street. That’s why it’s called reciprocal.”