U.S. and Brazil face ethanol trade tensions amid tariff disputes

U.S. ethanol producers and Brazilian agricultural sectors are facing significant trade tensions driven by reciprocal tariffs and regulatory barriers. The U.S. Chamber of Commerce has called on the U.S. Trade Representative to address a trade deficit in the ethanol market, noting that the U.S. imported $145 million worth of ethanol from Brazil in 2025 while exporting only $97 million.

U.S. producers report being at a disadvantage due to Brazilian tariffs, which rose to 18% in 2024, and non-tariff barriers such as the RenovaBio and RenovaCalc programs. Specifically, the RenovaCalc carbon calculation model is cited for imposing a 300% penalty on U.S. corn ethanol, limiting its access to carbon credits.

Simultaneously, the United States has applied additional surcharges on Brazilian imports, with some products facing cumulative duties of up to 37.5%. These measures have placed ethanol and soy production in regions like Goiás, Brazil, at the center of bilateral negotiations. The U.S. government has reportedly linked the reduction of these tariffs to various commercial and political demands, including improved market access for American biofuels in Brazil.