Brazil’s sugar and ethanol sector rejects new 25% US tariff
Brazilian sugar and ethanol producers say a new 25% US tariff disregards the realities of bilateral trade. The measure is due to take effect on July 22 and will affect a market that bought 253 million liters of Brazilian ethanol and 420,000 metric tons of sugar in 2025.
Tariff targets a major ethanol market
Brazilian sugar and ethanol producers have criticized a new 25% US tariff on Brazilian products, describing the measure as unjustified and a setback for commercial cooperation between the two countries. The additional duty, announced by the Office of the United States Trade Representative, is scheduled to take effect on July 22 and will apply to thousands of Brazilian products. Washington has cited what it considers unfair trade practices, an allegation rejected by the Brazilian government and industry organizations.
The United States remains an important destination for Brazil’s biofuel industry. According to the Brazilian Sugarcane and Bioenergy Industry Association, known as Unica, the country bought 253 million liters of Brazilian ethanol worth US$163 million in 2025. That made the United States Brazil’s second-largest foreign market for the fuel, behind South Korea. The tariff therefore affects an established outlet for producers even as bilateral ethanol flows have become increasingly contentious.
Sugar shipments had already fallen
The dispute also covers sugar, a product for which Brazilian suppliers already face US tariffs and market-access restrictions. US purchases of Brazilian sugar reached 420,000 metric tons in 2025, down sharply from 1.12 million metric tons in 2024, according to Unica figures reported by Reuters and G1. Brazil is the world’s largest sugar producer, but access to the US market remains constrained.
Unica said the new measure ignores asymmetries in the trading relationship. The association argues that Brazilian sugar remains subject to US barriers while Brazil maintains a non-discriminatory policy for ethanol. Renato Cunha, executive president of the sugar and bioenergy association NovaBio, said Washington was seeking better access for US ethanol without offering improved conditions for Brazilian sugar. In his assessment, Brazil does not need additional imported ethanol.
Corn ethanol changes Brazil’s supply balance
US Trade Representative Jamieson Greer included access to Brazil’s ethanol market among the reasons for the tariff. US government data show that Brazilian imports of American ethanol have declined significantly in recent years. Brazil currently applies an 18% tariff to imported ethanol, but the National Corn Ethanol Union, known as Unem, said the duty is non-discriminatory, complies with World Trade Organization rules and violates no bilateral agreement with the United States.
Unem attributed the fall in imports from the United States to rapid growth in Brazil’s domestic corn ethanol industry. Brazilian ethanol production was traditionally dominated by sugarcane processors, but corn and other grain-based capacity has expanded, increasing domestic fuel availability and reducing the need for imports. For producers and traders, the immediate risk is reduced competitiveness in the US market, while the broader dispute links access for American ethanol in Brazil to longstanding restrictions on Brazilian sugar in the United States.
