Will Brazil Remove a Quota on U.S. Ethanol Imports?

International Trade Partner Francisco Sanchez was featured in an article in Energy Advisor, a publication of The Dialogue, titled "Will Brazil Remove a Quota on U.S. Ethanol Imports?" Officials in Brazilian President Jair Bolsonaro’s administration have been in talks with their U.S. counterparts on the possibility of Brazil lifting quotas on U.S. ethanol in exchange for the United States doing the same for Brazilian sugar. Brazil currently applies a tariff-free quota of 750 million liters for U.S. ethanol with the surplus volume subject to a 20 percent levy. The article poses the question of how likely it is Brazil will eliminate the quota on U.S. ethanol imports.

"Bolsonaro must choose between severe damage to Brazil’s ethanol sector or potential retaliation by a Trump administration that views the ethanol industry as important to its support in Iowa," said Mr. Sanchez. "Despite being the ‘Trump of the Tropics,’ it is unlikely that Bolsonaro will cave to pressure because of the strain that COVID-19 has placed on Brazil’s ethanol sector."

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