Home Indiana Agriculture News RFA On Board with President on Brazil Ethanol

RFA On Board with President on Brazil Ethanol

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President Trump raised the possibility of reciprocal tariffs on Brazilian fuel ethanol coming here, as Brazil considers at least a 20 percent tariff on all U.S. ethanol starting next month. The U.S. ethanol industry is fully behind such a move. He was asked at a press briefing about Brazil’s plans to expand its three-year-old partial tariff on U.S. ethanol to 20 percent or more on every gallon, and Renewable Fuels Association head Geoff Cooper liked what he heard.

“We were very encouraged to hear President Trump on Monday when he was asked about this, say that if Brazil is going to do tariffs on U.S. ethanol, then we need to have some equity,” Cooper said. “We need to have some equalization in tariffs, and we need some reciprocity. And we totally agree.”

President Trump told a reporter, “you may be seeing something on that very soon.” RFA wrote to U.S. Trade Ambassador Robert Lighthizer following Trump’s remarks, urging retaliation, citing Brazil’s “path of protectionism and obstruction.”

Coper says, “Right now, they have completely open and free access to our marketplace. In fact, state and federal policy actually incentivizes, or sort of prioritizes, Brazilian sugarcane ethanol over even our own corn ethanol. So, we think it’s time to level the playing field.”

A level playing field is needed with estimates showing big U.S. losses since 2017.

“We’ve lost 350 million gallons of demand valued at somewhere around $400 million. So, that’s been a substantial hit to our industry. At the same time, we’ve been dealing with Small Refinery Exemptions in the domestic market, we’ve been dealing with the loss of the Chinese market, and most lately, we’ve been dealing with coronavirus and the impact that’s had on domestic demand.”

Cooper says U.S. imports of duty-free Brazilian ethanol are surging, with year-to-date levels at a seven-year high.