U.S. Reps. Randy Feenstra (R-IA) and Darin LaHood (R-IL) led two letters to the Biden administration urging greater action in developing new markets for biofuels exports and calling on U.S. Trade Representative Katherine Tai and U.S. Secretary of Agriculture Tom Vilsack to continue working towards the full repeal of Brazil’s costly tariff on American ethanol.
Both Feenstra and LaHood serve on the House Ways and Means Committee, which enjoys jurisdiction over federal trade policy.
“Iowa leads the nation in the production of ethanol and biodiesel. Our thriving biofuels industry powers our economy, supports our farmers, generates economic activity in our rural communities, and supports American energy independence. Unfortunately, despite our repeated calls, the Biden administration has failed to actively engage in the development of new markets for American biofuels exports or hold foreign countries accountable for unfair trade practices and market manipulation,” said Rep. Feenstra. “That’s why my colleague from Illinois, Rep. Darin LaHood, and I sent two letters asking the Biden administration to open new export markets for our farmers and biofuels producers and to help repeal Brazil’s costly tariff on American ethanol. With a $30-billion agricultural trade deficit projected for this fiscal year and farm income forecast to plummet by $40 billion, we must negotiate trade agreements that benefit American agriculture and advocate for our producers in global markets. It is our hope that President Biden and his agency heads will heed our requests and stand up for American farmers and biofuels producers.”
“Illinois is a leader in corn and biofuels production – and we must ensure free and fair market access to American ethanol,” said Rep. LaHood. “Brazil’s reimposed ethanol tariffs threaten Midwest farmers, producers, and our local economies. Eliminating these discriminatory trade barriers must be a priority for the Biden Administration, and I am proud to lead these letters with my friend Rep. Randy Feenstra to urge action and stand with American ethanol and agriculture.”
In one letter, the lawmakers write, “As you know, on February 1, 2023, CAMEX reinstated an import tariff on American ethanol exported to Brazil. Ethanol from the United States is subject to a 16% tariff, expected to rise to 18% this year, while ethanol shipped to the United States from Brazil receives duty-free treatment. Moreover, Brazilian ethanol imports are incentivized under the U.S. Renewable Fuels Standard and the newly created 40B Sustainable Aviation Fuel tax credit, as well as California’s, Oregon’s, and Washington’s Low Carbon Fuel Standard program. This treatment is not reciprocated for American corn ethanol in Brazil.”
“With the global SAF market anticipated to grow from under $2 billion this year to more than $133 billion in 2033, and with American-based biofuel feedstocks well poised to meet the scale of that growth, it is critically important that USTR remains committed to supporting American biofuel producers during global trade discussions. The United States should negotiate market-opening free trade agreements (FTA), and the Biden administration should use these negotiations to level the playing field for American workers, farmers, and businesses. In the absence of enforceable FTAs, we urge you to pursue an aggressive strategy to increase opportunities for market access through the reduction of trade barriers,” the lawmakers noted in a separate letter.
The letter to President Biden and U.S. Trade Representative Katherine Tai concerning biofuels exports can be found HERE.
The letter to U.S. Trade Representative Katherine Tai and U.S. Secretary of Agriculture Tom Vilsack concerning Brazil’s tariff on American ethanol can be found HERE.
