Monday, September 11, 2017

Brazilian tariff on imported fuels

Brazilian tariff bad for US Biofuels industry

Washington– US Agriculture organizations want the Trump administration to address a Brazilian tariff on imported biofuels.

Brazil imposed a tariff that cuts more than $750 million in US exports and American jobs. In August, Brazil instituted a two-year tariff rate quota for ethanol imports that includes a 20 percent tariff after a 600 million liters of imports.

According to a report from the Energy Information Administration, the US exported 28 million barrels of fuel ethanol in 2016 and at least 6.6 million barrels went to Brazil. So far this year exports to Brazil stand at 1.17 billion liters, according to Census Bureau trade data.

Tom Sleight of the US Grains Council President 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.”

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.

“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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