Brazil’s ethanol and sugar producers are facing a significant challenge after the US government imposed new 25% tariffs on Brazilian goods. The tariffs, which are set to take effect on July 22, will impact thousands of Brazilian products, including ethanol and sugar exports.

Impact on Brazil’s Ethanol Industry

The US accounted for 253 million liters of ethanol exports from Brazil in 2025, worth $163 million, making it the sector’s second-most important foreign market after South Korea. The Union of the Sugarcane and Bioenergy Industry (UNICA) expressed disappointment at the decision, stating that it disregards significant asymmetries in the trade relationship between the two countries.

Brazilian sugar exports to the US have also been affected, with 420,000 metric tons exported in 2025, representing a significant drop from the 1.12 million tons exported in 2024. The US Trade Representative, Jamieson Greer, justified the new tariffs, citing what he called unfair trade practices, an accusation rejected by Brazil.

Response from Brazil

Brazilian corn ethanol association UNEM stated that the country’s tariff was in accordance with World Trade Organization rules and that no bilateral agreement with the US was being violated. The reduction in Brazil’s imports of US ethanol stems from the expansion of domestic corn ethanol production, which increased the domestic supply.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.