Brazil reintroduces 20% tax on US ethanol
Audio 01:56
40% of corn grown in the United States is turned into ethanol (illustrative image).
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By: Claire Fages Follow
5 mins
Under pressure from its sugar lobby, Brazil is once again imposing a 20% tax on all ethanol imports from the United States.
Relations are strained between Presidents Trump and Bolsonaro, against a backdrop of electoral stakes.
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The Brazilian president had until midnight August 31 to renew the duty-free quota that benefited imports of corn ethanol from the United States.
But Jair Bolsonaro has not lifted a finger.
This American agrofuel quota is therefore obsolete.
A year ago, however, the Brazilian leader had, at the last minute, extended this duty-free quota to 700 million liters, in order to satisfy the United States.
This caused an uproar from the Brazilian sugar and ethanol industry.
But it seems a long time ago when Jair Bolsonaro sought at all costs to secure the friendship of Donald Trump.
Too much ethanol in Brazil as in the United States because of the coronavirus
In the meantime, there was the coronavirus crisis.
The consumption of fuels and therefore of ethanol has collapsed in the United States as in Brazil.
Each seeks to preserve its internal market and to export its surpluses.
The north and northeast of Brazil, usually dependent on ethanol imports because they did not produce enough, do not need American ethanol this year.
The Brazilian currency has also collapsed against the dollar, American ethanol is now too expensive.
After the failure on steel, Bolsonaro wants to spare his own agricultural electorate
And then the presidential election is also approaching in Brazil.
It is scheduled for 2021. Jair Bolsonaro and his family are surrounded by business.
And Donald Trump let Brazil go on steel last week: Brazilian semi-finished products will be taxed more, like those of the United States' other trading partners.
Now Jair Bolsonaro stops sparing the American agricultural electorate in order to spare his own.
Brazilian sugar and ethanol producers are encouraging Brasilia to renegotiate everything, imports of American ethanol for duty-free exports of Brazilian sugar.
The leader of Unica, the association that represents the sugar industry in Brazil, sums it up very well: “
Bolsonaro has the choice of supporting the Americans or the Brazilians… And I think, he continues, that he will support his compatriots. .
"
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