Ethanol Blog: Brazil's Ethanol Trade Barriers Cost US Producers Billions: USTR Responds with 25% Tariff Threat Public Comments DEADLINE July 1, 2026

June 03, 2026

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by Todd Neeley (DTN Progressive Farmer) The U.S. Trade Representative is set to levy a 25% tariff on Brazilian goods including ethanol, in retaliation for what the USTR has determined was an "unreasonable" burden placed on U.S. ethanol imports to Brazil.

The USTR's proposed actions cover a variety of goods and services in Brazil.

At the core of the U.S. complaint against Brazil is that the country "abandoned bilateral cooperation" on ethanol trade and established non-reciprocal and "unfair" conditions.

In 2010 Brazil suspended its 20% ethanol tariff to facilitate bilateral trade. In 2011, the U.S. reciprocated by allowing the blender tax credit and the 54-cent, per gallon import surcharge to expire. In 2017, Brazil abruptly reversed course and instituted a duty-free tariff rate quota of 600 million liters, with imports above that threshold subject to a 20% tariff.

Since 2023, Brazil has maintained an 18% tariff on ethanol with the ability to change it monthly.

According to a document released by the USTR this week, the agency has attempted to quantify the damage to U.S. ethanol producers.

U.S. exports to Brazil peaked at $762 million in 2018 and dropped to just $96 million in 2025, which is an 87% decline, according to the USTR.

In 2024, U.S. ethanol import market share in Brazil fell to 54% down from nearly 100% in 2018.

The U.S. imported about $203 million worth of ethanol from Brazil in 2024, while exporting just $53 million to Brazil.

After Brazil reimposed tariffs in 2017, U.S. ethanol exports to Canada grew from 326 million gallons to 698 million gallons in 2024. Exports to Brazil that year fell from 430 million gallons to just 28 million gallons, according to the USTR.

On Monday, the USTR opened a comment period on the proposed penalties for Brazil. A public hearing is scheduled for July 6, 2026, and written comments to the agency are due by July 1, 2026. READ MORE

Related articles

USTR Makes Findings and Proposes Action in 60 Section 301 Investigations Relating to Failures to Take Action on Trade in Forced Labor Goods (US Trade Representative)
USTR proposes 25% Brazil tariff, citing ethanol, other trade barriers (Agri-Pulse)
Ethanol Trade Opportunities Expand Despite Brazil Tariff -- USDA Undersecretary for Trade Luke Lindberg says expanding export demand is creating new opportunities for U.S. ethanol producers.(RFD TV; includes VIDEO)
RFA Supports Trump Administration Response to Brazil’s Unfair Trade Practices (Renewable Fuels Association)
RFA, Growth Energy testify in support of USTR response to Brazil’s unfair trade practices (Ethanol Producer Magazine)

Excerpt from US Trade Representative: Today (June 2, 2026), the United States Trade Representative determined under Section 301 of the Trade Act of 1974 that the acts, policies, and practices of 60 economies related to the failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor is unreasonable and burdens or restricts U.S. commerce, and are thus actionable under Section 301(b) of the Trade Act. The Office of the United States Trade Representative (USTR) has prepared a comprehensive report, Acts, Policies, and Practices of Various Economies Related to the Failure to Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced with Forced Labor, that supports the findings in each investigation.

“The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field,” said Ambassador Jamieson Greer. “We will no longer tolerate this disparity. Some trading partners have taken initial steps to prevent the importation of forced labor goods, including through USMCA and commitments in Agreements on Reciprocal Trade. However, each of our trading partners must do more to ensure that trade does not perversely encourage and entrench forced labor globally.”

As a result of these determinations in the investigations, the U.S. Trade Representative has proposed responsive action for public comment.

Specifically, the U.S. Trade Representative proposes additional duties on all products of the investigated economies, except as provided in Annex A to the Federal Register notice. For economies that impose a forced labor import prohibition, that have committed to impose and enforce such a prohibition through an Agreement on Reciprocal Trade, or economies that have imposed a partial regime with the effect of preventing the importation of certain forced labor goods, the U.S. Trade Representative proposes 10% as the rate of additional duties. For all other economies, the U.S. Trade Representative proposes 12.5% as the rate of additional duty. The U.S. Trade Representative also proposes a textile mechanism that would allow for a certain volume of apparel and textile imports from certain economies to enter the United States at a reduced Section 301 tariff rate.

To be assured of consideration, interested persons should submit requests to appear at the hearings, along with a summary of testimony by June 22, 2026.

Written comments are due by July 6, 2026.

USTR will hold hearings about the proposed actions in these investigations on July 7, 2026.

A copy of the Report is available here.

A copy of the Federal Register notice setting out the U.S. Trade Representative’s actionability determination and proposed actions is available here.

A docket for comments regarding the investigations will be available here.

A docket for requests to appear at the public hearings to be held in connection with these investigations will be available here.

Background

Section 301 of the Trade Act of 1974, as amended (Trade Act), is designed to address unfair foreign acts, policies, or practices affecting U.S. commerce. Section 301 may be used to respond to unjustifiable, unreasonable, or discriminatory foreign government acts, policies, or practices that burden or restrict U.S. commerce. Under Section 302(b) of the Trade Act, the Trade Representative may self-initiate an investigation under Section 301.

On March 12, 2026, the U.S. Trade Representative initiated 60 investigations related to the failure of various economies to impose and effectively enforce a prohibition on the importation of goods produced with forced labor.

Pursuant to Section 304(b)(1)(A) of the Trade Act, USTR provided the public and interested persons with opportunities to present their views through a public comment process and through a public hearing. USTR received testimony of nearly 60 witnesses and 500 comments and rebuttal comments.

The U.S. Trade Representative today has determined that the failure of each of the 60 investigated economies to impose and effectively enforce a forced labor import prohibition is unreasonable or discriminatory and burdens or restricts U.S. commerce, and thus is actionable under Section 301(b)(1) of the Trade Act. In particular, the U.S. Trade Representative determined:

The following 54 economies have failed to impose and effectively enforce a prohibition on the importation of goods produced with forced labor:
- Algeria; Angola; Argentina; Australia; the Bahamas; Bahrain; Bangladesh; Brazil; Cambodia; Chile; China, People’s Republic of; Colombia; Costa Rica; Dominican Republic; Egypt; El Salvador; Guatemala; Guyana; Honduras; Hong Kong, China; India; Iraq; Israel; Japan; Jordan; Kazakhstan; Kuwait; Libya; Malaysia; Morocco; New Zealand; Nicaragua; Nigeria; Norway; Oman; Peru; the Philippines; Qatar; Russia; Saudi Arabia; Singapore; South Africa; South Korea; Sri Lanka; Switzerland; Taiwan; Thailand; Trinidad and Tobago; Türkiye; United Arab Emirates; United Kingdom; Uruguay; Venezuela; and Vietnam.
The following six economies have failed to effectively enforce a prohibition on the importation of goods produced with forced labor: Canada; Ecuador, the European Union; Indonesia; Mexico; and Pakistan.
Therefore, all of the investigated economies have failed both to impose a forced labor import prohibition and to effectively enforce such a prohibition.
The failure of each of the investigated economies to impose and effectively enforce a forced labor import prohibition is unreasonable because it: (1) undermines the universal aim of eliminating forced labor; (2) permits firms that avail themselves of forced labor to produce goods at lower cost and thereby distort market conditions for firms that do not use forced labor; (3) undermines the profitability of firms that do not use forced labor; and (4) contributes to the circumvention of existing forced labor import prohibitions.
The failure of each of the above-listed economies to impose and effectively enforce a forced labor import prohibition burdens or restricts U.S. commerce by subjecting U.S. producers to unfair competition from forced labor goods both in export markets and the U.S. market, and by displacing foreign goods produced without forced labor or forced labor inputs into the United States and other markets.

The U.S. Trade Representative has also determined to propose responsive actions in these investigations. As set out in the Federal Register notice, the public is invited to provide written comments by July 6, 2026, on the proposed actions.

USTR will hold hearings about the proposed actions on July 7, 2026. As set out in the Federal Register notice, interested persons are invited to submit requests to appear at the hearing by June 22. READ MORE

Excerpt from RFD TV:

U.S. Trade Representative Jamieson Greer is considering a 25 percent tariff on a number of Brazilian products following an investigation into the country’s trade practices, including its ethanol market.

Brazil’s 18-percent tariff on U.S. ethanol remains in place, but USDA Undersecretary for Trade and Foreign Agricultural Affairs Luke Lindberg says global demand for U.S. ethanol continues expanding.

“The world is opening up to U.S. ethanol. They recognize that it is a low-cost ‘win, win’ opportunity for many folks who need sustainability targets that they have set for themselves, and to reduce the price at the pump for us consumers. We have seen progress in Vietnam and Taiwan. We have seen a 50% increase in U.S. ethanol going into the United Kingdom.”

Lindberg pointed to growing opportunities in several international markets, including Guatemala, where implementation of an E10 blend mandate is expected later this summer.

“We’re continuing to see tremendous progress on getting that E10 blend mandate implemented by June 30th of this summer. It was great for President Arevalo and me to connect and make sure that we’re staying on track for implementation of that particular agreement.”

A trade investigation remains underway regarding Brazil’s ethanol import tariff.

Corn Growers Push for E15 in Senate Farm Bill Fight

Meanwhile, year-round E15 access remains a top priority for many corn growers. Rodney Weinzierl with the Illinois Corn Growers Association says he is optimistic the proposal still has a chance of becoming law. READ MORE; includes VIDEO

Excerpt from Renewable Fuels Association: In testimony today (July 6, 2026) at the U.S. International Trade Commission, the Renewable Fuels Association expressed its gratitude to the Trump administration for its “steadfast commitment to removing unfair barriers to U.S. ethanol exports shipped to Brazil and around the globe” and noted it “strongly supports” the reciprocal tariff applied to imports from Brazil.

“Prior to the implementation of punitive trade barriers, Brazil and the United States enjoyed an open and efficient two-way trading relationship in ethanol, which resulted in our two nations experiencing a dramatic increase in bilateral ethanol trade,” said RFA General Counsel and Vice President, Government Affairs Ed Hubbard. “However, beginning in 2017, Brazil unilaterally began abandoning this mutually beneficial approach, instead turning to a pro-tariff policy, clearly erected in an effort to disadvantage U.S. ethanol imports.”

As a result of this newly applied tariff regime, the value of U.S. fuel ethanol exports to Brazil fell to zero in 2023, just $43 million in 2024 and $68 million in 2025, Hubbard added. U.S. ethanol exports to Brazil accounted for just 1.3 percent of total U.S. ethanol exports in 2024 and 1.8 percent of exports in 2025, after accounting for approximately one-third of total U.S. exports as recently as 2018.

Hubbard also pointed to Brazil’s implementation of its “RenovaBio” national biofuels policy, which is designed to reduce the carbon intensity of Brazil’s transportation fuel matrix, as another example of Brazil’s discriminatory trade practices. The RenovaBio program is expected to generate 5 billion gallons of new biofuel demand in Brazil through 2030. However, after five years of implementation, not a single U.S. ethanol plant has received a full certification from the Brazilian government to generate credits under the RenovaBio program.

Click here for related comments filed by RFA last week with the U.S. Trade Representative. READ MORE

Excerpt from Ethanol Producer Magazine: Growth Energy also delivered testimony at the hearing backing proposed U.S. penalties against Brazil.

“Brazil has been systematically working to undermine the U.S. bioeconomy since 2017, all while enjoying complete and unfettered access to American markets,” explained Growth Energy’s Chris Bliley, senior vice president of regulatory affairs in written testimony. “We support the administration’s efforts to restore balance to our trade relationship with Brazil. To that end, we’re encouraging USTR to go beyond the proposed tariff, and take additional actions to end deceptive practices designed to disguise illegal deforestation by Brazilian producers and block U.S. products from participating in clean fuel markets.”

Among other remedies, Growth Energy is calling on USTR to work with the U.S. EPA to remove Brazilian ethanol’s ability to generate credits under the U.S. Renewable Fuel Standard. Currently, RenovaBio, Brazil’s renewable fuel program, effectively blocks U.S. biofuels, even as Brazilian ethanol receives favorable treatment under the U.S. program.

“Brazil continues to stoke unfounded claims about land use change attributed to U.S. ethanol—yet the land use change and deforestation continue in Brazil. And remarkably, we are charged a land use change penalty by regulators both here and abroad for things that are occurring in Brazil,” Bliley will say in his verbal testimony. “These unfounded penalties directly harm our ethanol exports to the United Kingdom, Japan, and the European Union and are inherent barriers to the use of U.S. ethanol as a marine or sustainable aviation fuel. All while Brazil continues to seek a free pass for its own producers. It makes no sense.” READ MORE