U.S. Plans Higher Ethanol Tariffs Amid Brazil Trade Tensions

The U.S. ethanol export landscape is shifting as President Trump announces plans to impose reciprocal tariffs on countries with higher ethanol tariffs, specifically targeting Brazil, which currently levies an 18% tariff on U.S. ethanol imports compared to the U.S.'s 2.5% tariff. The ethanol industry in the U.S. has seen exports to Brazil dwindle, prompting hopes that these new tariffs will restore fair trade practices. Brazilian Energy Minister Alexandre Silveira criticized the U.S. decision as unreasonable, arguing that true reciprocity would require the U.S. to eliminate its tariffs on Brazilian sugar. He cautioned that such unilateral measures could strain global trade relations and negatively affect the U.S. economy. The U.S. imported over $200 million in ethanol from Brazil in 2024 while exporting only $52 million, highlighting the trade imbalance. As negotiations may commence, the potential for higher tariffs could arise by April, affecting multiple trading partners.