Brazil is pushing to increase tax-free sugar exports to the U.S. during ongoing trade talks in Washington, aiming to shield its sugar sector from potential ethanol tariffs, according to sources. The South American nation seeks to expand the current annual quota of 147,000 metric tons of duty-free sugar, beyond which exports face an 80% tariff. With 1.1 million tons shipped to the U.S. in 2023, Brazil argues that a higher quota would stabilize production if ethanol demand falters under new tariffs.
The urgency stems from U.S. plans to unveil reciprocal tariffs by April 2, which may target Brazilian ethanol—a renewable fuel produced from sugarcane. Recent meetings between Brazilian Vice President Geraldo Alckmin, Foreign Minister Mauro Vieira, and U.S. officials Howard Lutnick and Jamieson Greer established technical groups to negotiate tariffs, with Brazil also seeking to boost meat export quotas.
Simultaneously, Brazil’s corn ethanol sector is booming, with Citi forecasting production to nearly double to 16 billion liters by 2032. This growth underscores Brazil’s strategic pivot to diversify its biofuel portfolio amid trade uncertainties.