WASHINGTON, Sept. 7, 2017 – A trio of American organizations say the Trump administration should take action to address a Brazilian tariff on imported biofuels.
The call to action comes after Brazil imposed a tariff that the groups say “threatens over $750 million in U.S. exports and American jobs.” About two weeks ago, Brazil announced a two-year tariff rate quota (TRQ) for ethanol imports that includes a 20 percent tariff after a 600 million liters of imports.
According to data from the Energy Information Administration, the U.S. exported almost 28 million barrels of fuel ethanol in 2016 – about 4.4 billion liters – and about 6.6 million barrels – over 1.05 billion liters – went to Brazil. Exports to Brazil are moving at a quicker pace this year, however, with shipments through July already at 1.17 billion liters, according to Census Bureau trade data.
In a statement, Growth Energy, the Renewable Fuels Association, and the U.S. Grains Council called on the administration to “immediately engage their Brazilian counterparts on the future of our relationships with regard to biofuels.” The groups said the administration should “consider all avenues to encourage Brazil to either revoke the TRQ or substantially increase the tariff-free quota level to better reflect the current ethanol market and trade realities.”
In individual statements, leaders of the three organizations offered more pointed comments about potential outcomes if the Brazilian action is left unchecked.
U.S. Grains Council President and CEO Tom Sleight said the Brazilian tariff “will ultimately hurt the global industry and our collective ability to reap the benefits of biofuels.”
Growth Energy CEO Emily Skor said the tariff is a violation of a longstanding U.S.-Brazilian agreement and “the United States should not take this lying down.”
“Brazil’s actions undermine the zero-ethanol tariff arrangement between our two countries that has been in place for several years,” she said. “President Trump has been a strong supporter of America’s biofuels producers, and decisive action to defend this crucial domestic industry will be a clear reminder of the administration’s continued commitment to strengthen the American economy.”
Bob Dinneen, president and CEO of the Renewable Fuels Association, said both the U.S. and Brazil “have benefitted greatly from the free and fair trade” between the two countries, but that’s now at risk.
“Unfortunately, Brazil’s recent protectionist actions are turning back the clock to an era of isolationism and inefficient global trade,” he said. “In the end, Brazil’s new trade policy not only harms U.S. ethanol producers, but also penalizes Brazilian consumers who will be forced to pay more for their fuel.”
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