After President Donald Trump signaled commercial retaliation if Brazil does not reduce import tariffs on American ethanol, Brazilian negotiators began to raise arguments to try to stop the United States' offensive, which should intensify by the end of August.
The main one, discussed among technicians in the government and agribusiness leaders, is to agree to drop ethanol tariffs provided that Washington does the same with Brazilian sugar exported to the United States.
As Brazil does with foreign ethanol, Americans also have a quota for the entry of sugar into the country. According to Unica (Union of the Sugarcane Industry), what goes beyond this limit is taxed at 140%, which simply kills the product's competitiveness in the American market, national producers say.
Brazil applies a quota of 750 million liters of American ethanol that enter the country without import tax. The surplus pays a 20% surcharge.
All Brazilian ethanol exported to the USA, on the other hand, is taxed at 2.5%, according to interlocutors in the government.
The idea of members of the Bolsonaro administration is to use this argument precisely to counter Trump's call for "reciprocity" in commercial relations.
Translated by Kiratiana Freelon