Brazil and U.S. Anticipate Lengthy Tariff Negotiations on Sugar and Ethanol

Brazilian Finance Minister Fernando Haddad anticipates extended tariff negotiations with the United States that will encompass sugar and ethanol trade discussions. The U.S. plans to unveil tariffs, which Brazil considers unfair, particularly in comparison to its own trade practices. Brazil emphasizes a strategy focused on reciprocity and is actively reviewing its trade agenda ahead of negotiations.

Brazilian Finance Minister Fernando Haddad announced on Thursday that the government anticipates extended tariff discussions with the United States, which he indicated will encompass negotiations involving both sugar and ethanol. Minister Haddad remarked, “As they are waging war with the entire world, they will not make an exception for Brazil. That certainly will not happen.” He emphasized that during negotiations, Brazil would advocate for sugar while the U.S. would focus on ethanol discussions.

The context for these negotiations arose when U.S. President Donald Trump revealed plans to impose higher import tariffs, which were scheduled to be detailed by early April. A White House fact sheet highlighted Brazilian ethanol tariffs as illustrations of unfair trade practices. In response, Brazil’s Energy and Mining Minister Alexandre Silveira deemed any potential U.S. tariffs on Brazilian ethanol as unreasonable, citing the historical correlation in the negotiation of both ethanol and sugar trade between the two nations.

Brazil, being one of the largest sugar producers globally, predominantly produces its ethanol from sugarcane, contrasting with U.S. ethanol, which is primarily corn-based. Brazilian officials have criticized the existing high U.S. tariffs on sugar imports outside of preferential quotas, asserting that these exceed Brazil’s tariffs on ethanol.

Haddad also pointed out that services trade with the U.S., where Brazil exports significantly less than it imports, could be another critical element in the negotiations. He emphasized that Brazil aims to engage in discussions without escalating tensions related to tariffs. Therefore, Brazil is meticulously examining its entire import and export agenda, preparing demands to present at the negotiating table while adhering to a principle of “reciprocity, not retaliation.”

In conclusion, Brazil is poised for protracted discussions with the U.S. over tariffs, particularly concerning sugar and ethanol. The Brazilian government, while prepared with demands based on reciprocity, aims to avoid exacerbating trade tensions. The outcome of these negotiations, particularly in the context of U.S. tariffs on imports, remains to be seen as Brazil reviews its entire trade framework with the United States.

Original Source: money.usnews.com