Brazil urges US to give more tax exemption for sugar exports

12-Mar-2025 08:34 PM

Brazil Pushes for More Tax Exemptions on Sugar Exports to the US

São Paulo: Brazil, the world’s largest sugar producer and exporter, is pressing the United States to expand duty-free export quotas for sugar amid growing concerns over potential tariff hikes on ethanol imported from Brazil.

Key Concerns:

• The Brazilian sugar industry has long sought an increase in duty-free quotas for sugar exports to the US but has made little progress.
• The renewal of the existing tax-free quota is also uncertain, raising concerns over future exports.
• The US is reportedly considering raising customs duties on Brazilian ethanol, a move that could disrupt trade between the two countries.

US Trade Policies & Challenges for Brazil:

• In February 2025, US President Donald Trump hinted at introducing "reciprocal taxes" on imports from China, India, South Korea, Canada, Mexico, and Brazil.
• Ethanol, a key Brazilian export made primarily from sugarcane, could be specifically targeted for new tariffs.
• Although the US has not yet imposed import duties on ethanol, there is speculation that it may be included in a new tariff package set to take effect on April 2, 2025.
• On the same date, the US government is also expected to announce its decision on whether to impose tariffs on Indian exports.

Brazil’s Next Steps:

• Brazilian officials are pushing for urgent trade talks with the US to secure favorable terms for sugar and ethanol exports.
• Without an agreement, Brazilian sugar exporters may face higher costs and reduced competitiveness in the US market.
• The Trump administration appears reluctant to grant tariff exemptions, making negotiations critical for Brazil's trade future.

With uncertain US policies and Brazilian sugar and ethanol exports at risk, diplomatic efforts are crucial in avoiding trade disruptions and ensuring continued access to the US market.