US tariffs put Brazilian ethanol and soy at center of trade talks

Tariffs raise uncertainty for Brazilian exporters

Additional US tariffs on Brazilian products have increased uncertainty around bilateral trade and brought ethanol and soybeans—two important industries in Goiás—into negotiations between Washington and Brasília. In July, the United States began applying additional surcharges of 25% and 12.5% to portions of imports from Brazil. The rates can accumulate to 37.5% for certain products, according to O Hoje. Brazil’s Ministry of Development, Industry, Trade and Services, known as MDIC, estimates that the measures affect 23.1% of Brazilian exports to the US market.

Estadão, which obtained copies of US proposals presented to Brazil, reported that the administration of President Donald Trump tied tariff reductions to a series of commercial and political demands. An initial proposal submitted on October 16, 2025 contained 21 actions. A second version, sent on January 9, 2026, narrowed the agenda and removed some demands related to Brazilian domestic policy. Talks between the two governments resumed in late August.

Ethanol market access becomes a bargaining point

Ethanol is directly involved in the dispute. A US trade investigation included access for American biofuel to Brazil among the matters considered by the Office of the US Trade Representative. Washington had also called in earlier proposals for Brazil to eliminate its tariff on US ethanol. Brazil argues that this duty forms part of Mercosur’s Common External Tariff, while Brazilian ethanol and sugar also encounter barriers in the US market.

Any change in import conditions could affect an expanding production chain in Goiás. The state produced about 5.3 billion liters of ethanol in the 2025/2026 crop year, including 841.6 million liters made from corn. Its inventories of hydrous ethanol in July 2026 were 76% higher than one year earlier. That stock position may increase producers’ sensitivity to additional competition from imported fuel.

Brazilian ethanol exports could reach 1.535 million cubic meters in the 2026/2027 crop year, up 20% from the previous season. However, Brazil’s competitiveness may weaken from October or November, when US ethanol is expected to become cheaper. The Brazilian Sugarcane and Bioenergy Industry Association, Unica, has called for a negotiated solution, saying that the two countries are leading global biofuel producers and have significant opportunities for cooperation.

Soy flows carry wider market implications

Soybeans were included in the first US proposal through a call for Brazil and the United States to work together to stabilize global trade in the crop. Soy is not among the main goods identified as subject to the new specific surcharges, but policy changes involving two major producers and exporters could redirect purchases, export destinations and prices across international markets.

For Goiás, the exposure extends beyond farm output. State soybean production is estimated at 20.1 million tonnes for the 2025/2026 season, the second-largest volume in its historical series, with yields above the Brazilian average. Goiás exported 319,400 tonnes of soybean meal in June, a record for that month. Processing facilities concentrated in Rio Verde, Jataí, Itumbiara, Anápolis and Luziânia add industrial value beyond exports of unprocessed beans.

The effects will depend on how trade flows change among Brazil, the United States and other buyers. Stronger demand for Brazilian soy could support domestic prices and export premiums, while abundant global supply or lost market access could put quotations under pressure. O Hoje reported that competition among buyers had already lifted Brazilian prices and premiums in July, although global supply limited the increase. For producers, processors and traders in Goiás, the outcome of the negotiations will therefore affect both access to the ethanol market and the commercial position of the state’s soybean complex.