US Biofuel Industry Sees Threats to Feedstock From Trump Tariffs

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April 16, 2025

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by Kim Chipman (Bloomberg/MSN) ... “If this tariff holds true on ethanol imports, the result is a higher cost SAF product that we are making in the US,” LanzaJet Chief Executive Officer Jimmy Samartzis said in an interview, referring to a new levy on Brazilian products. “There is no alternative for a US-produced ethanol that qualifies.”

While the green jet fuel industry is in its infancy, the potential setback from tariffs could have a chilling effect on US investment at a time when China and Brazil are looking to ramp up their own domestic SAF markets.

LanzaJet’s dilemma underscores the ripple effects President Donald Trump’s levies are having on the US biofuels market and the agriculture sector that supports it. The impacts are being felt in terms of imports of supplies that feed plants, and there are also concerns over what retaliatory measures from trading partners will mean for exports. Meanwhile, the trade fights are hitting at a time when the industry was already contending with uncertain policy out of Washington, especially as the Trump administration has taken aim at climate change policies that had given a boost to renewable fuels.

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One particular area of concern is US green diesel.

Some producers of the biofuel have been depending on feedstocks of used cooking oil, or UCO, from China. Now, that trade could also come with higher expenses.

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Shrinking imports of waste oils and fats could be potentially good news for US farmers and processors of soybeans. Fresh soy oil, made by crushing whole beans, is also used as a biofuel feedstock. In the past, it’s faced stiff competition from UCO, which is seen as having a smaller carbon footprint and can therefore be more valuable under federal policy as well as in low-carbon markets like California. Soy oil futures in Chicago slumped 16% last year.

The impact from tariffs could lend more support to soy oil over foreign UCO this year. That would help US farmers, who are growing concerned that their shipments of soybeans to China will see shrinking demand amid the trade spat. READ MORE

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Excerpt from Reuters: Brazil was also making headlines in commodity markets on Thursday (July 10, 2025) after the announcement of U.S. tariffs, a move that could ultimately prove harmful to future U.S. grain export potential.

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There were three other times within the past couple of decades when early July corn export sales exceeded USDA’s June forecast, and final exports in all three seasons were at least 4% higher than what USDA had been estimating in June.

However, two of those seasons featured crop shortfalls in South America, which is not the case this year, potentially limiting U.S. export upside. Brazilian agency Conab on Thursday increased the 2024-25 corn crop to record levels, up 14% from last year.

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But Brazil has gotten a slow start to its corn exporting season, perhaps benefitting U.S. suppliers. Brazil’s shipments typically spike in July, though this month’s volume may not be record-setting.

Brazilian corn not only has to contend with U.S. competition, but it may also have to compete for port space with soybeans, which may have a more extended export season.

This could limit U.S. corn exports for 2025-26, which starts on September 1. USDA’s current 2025-26 export target is also lofty and potentially questionable given the strong South American offering, but the early progress is good, as are the U.S. harvest prospects.

As of July 3, U.S. export sales for 2025-26 totaled an above-average 5.42 million tons. That is a nine-year high for the date when excluding sales to China, which has not bought significant U.S. corn volumes in over two years.

BRAZIL TARIFFS

The Trump administration on Wednesday announced 50% tariffs on products from Brazil starting August 1, which were linked to Brazil’s legal proceedings against former President Jair Bolsonaro, an ally of U.S. President Donald Trump.

It certainly has nothing to do with trade balance, which has been the focus of U.S. tariffs on other trading partners. The United States enjoys a moderate trade surplus with Brazil when it comes to all goods.

However, the U.S. is in a steep deficit when it comes to agricultural trade with Brazil, primarily due to Brazil’s ability to produce coffee, sugar and fruits. More than half of the orange juice consumed in the United States now comes from Brazilian oranges.

Over 99% of the coffee consumed in the United States is imported and Brazil supplied 30% of that last year, nearly $2 billion worth. Forest products and beef were Brazil’s next-largest offerings last year, combining for nearly $3 billion, so the tariffs could certainly raise food and beverage prices for American consumers should they take effect. READ MORE

Excerpt from Reuters:

Trump links tariffs to 'witch hunt' against Bolsonaro
Lula calls emergency meeting to address new tariffs
Brazil's real falls over 2% after tariff announcement
Tariffs may raise U.S. food prices, impacting coffee and orange juice imports

WASHINGTON/BRASILIA, July 9 (Reuters) - U.S. President Donald Trump said on Wednesday the U.S. would impose a 50% tariff on all imports from Brazil after a spat this week with his Brazilian counterpart who called him an unwanted "emperor."

Brazil's President Luiz Inacio Lula da Silva fired back on Wednesday, saying new tariffs would be met with reciprocal measures.

In a letter, Trump linked the tariffs to Brazil's treatment of former President Jair Bolsonaro, who is on trial over charges of plotting a coup to stop Lula from taking office in 2023.

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Lula, his vice-president, his finance minister, and others held an emergency meeting in Brasilia on Wednesday night to discuss the new levies.

In a lengthy post to social media after the meeting, Lula said Trump's accusations that trade between the two countries was unfair to the U.S. were false, stressing the U.S. runs a trade surplus against Brazil.

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"Sovereignty, respect, and the unwavering defense of the interests of the Brazilian people are the values that guide our relationship with the world,” Lula wrote.

The U.S. is Brazil's second-largest trading partner after China and the tariffs are a major increase from the 10% announced in April. Trump's letter said the 50% tariff will start August 1 and will be separate from all sectoral tariffs.

On Monday, Lula pushed back against Trump after the U.S. leader threatened to impose an additional 10% tariff on the BRICS group of developing nations, which he called "anti-American."

"The world has changed. We don't want an emperor," Lula told reporters when asked at a BRICS summit in Rio de Janeiro about the possible BRICS tariff.

BOLSONARO 'WITCH HUNT'

Tensions between the United States and Brazil had already intensified on Wednesday after Brazil's foreign ministry summoned the U.S. Embassy chargé d'affaires over a statement defending Bolsonaro.

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In a post on social media, Bolsonaro did not mention Trump, but said he "is persecuted because he remains alive in the public consciousness. Even out of power, he remains the most remembered—and most feared—name."

In his letter, Trump also directed U.S. Trade Representative James Greer to initiate a probe into what he called unfair trade practices by Brazil, particularly on U.S. companies' digital trade. Trump also criticized decisions from Brazil’s Supreme Court that he said censored social media firms.

Brazil's Supreme Court has long been criticized by Bolsonaro's allies for ordering social media websites to take down content from leaders of their far-right movement. The court also imposed more responsibilities on those companies last month.

In his post on Wednesday, Lula rebuffed Trump’s accusations of a witch hunt and said the case against Bolsonaro was up for the courts to decide and not subject to any “threats that could compromise the independence of national institutions.”

Lula also defended his country’s Supreme Court and its ruling on social media and said “freedom of expression must not be confused with aggression or violent practice.” READ MORE