Brazil Lowers Tariff on Ethanol and Other Ag Imports

Brazil, in an effort to curb inflation, is cutting tariffs on ethanol imports, but it’s unclear precisely how much more the country will buy from the U.S. As of November 5, the Brazilian tariff dropped from 20% to 18%, according to a report by USDA’s Foreign Agricultural Service.

The U.S. had become accustomed to selling ethanol tariff-free to Brazil. Brazil erected the 20% tariff in 2017 in an effort to shield domestic producers, but the country also set up a 198-million-gallon tariff rate quota. That quota expired last year, and the countries’ negotiators failed to reach a deal to reinstate it.

Brazil also cut tariffs on other ag commodity imports, such as beef, blueberries, cheese and whey. The tariff reductions are temporary and are scheduled to remain in effect through December 31, 2022.

EDITOR’S TAKE:

A step in the right direction as far as U.S. ag is concerned. Opening the door a little wider is a good first step. Now the challenge is to get the tariffs eliminated completely. Brazil can be a good market for many of the commodities mentioned, including ethanol. The reduction may not seem all that significant, but 2% of very large sales volume still puts more money in the farmer’s pocket. That typically means they will spend at least part of that money on things like ag equipment, buildings and storage and, of course, new trucks. That’s where you come into play. Make sure farmers/ranchers know you are a CAD member and offer AgPack. We will certainly continue to do our part to ensure they come into your dealership!