United States is disappointed with closure of import tax exemption

segunda-feira, fevereiro 06, 2023

The Brazilian government decided to end the tariff exemption on ethanol imports with immediate effect, a measure that would mainly harm the U.S. biofuel industry.

From now on, ethanol imports will pay a 16% fee to enter Brazil by the end of the year. This rate will increase to 18% in 2024, according to a statement published on Wednesday night, 1st, on the website of the Ministry of Agriculture.

The United States is the largest supplier of fuel to Brazil, which despite being a large producer usually imports some cargoes to serve the Northeast region.

"We were disappointed with Brazil's decision to restore a high tariff on U.S. ethanol imports," Geoff Cooper, president and chief executive officer of the U.S. Renewable Fuels Association (RFA), said on Thursday.

"As the world's two largest ethanol producers and consumers, the U.S. and Brazil should set an example of cooperation and open markets – not protectionism and market interference," he added.

Former President Jair Bolsonaro's government had zeroed out the ethanol import tax last March as part of other measures to reduce fuel and food costs.

The decision to end the exemption comes days before President Luiz Inácio Lula da Silva's trip to the U.S. to meet with President Joe Biden. Thus, the RFA said it expects the issue to be addressed at the White House meeting.

Brazilian Agriculture Minister Carlos Fávaro said the tax exemption was hurting the local sugar and ethanol industry and had to end.

The ministry said Brazilian plants have the capacity to supply ethanol throughout the country without risk of high prices.

Source: RPA news