Tarcísio says that ethanol should not be a bargaining chip in dispute with the USA
The governor of São Paulo, Tarcísio de Freitas (Republicans), stated this Monday (20) that ethanol should not enter the trade negotiation table with the United States, amid the tariff escalation imposed by the Donald Trump government against Brazilian products.
The statement was made during the 25th Datagro International Conference on Sugar and Ethanol, in São Paulo, and signals the São Paulo government’s position on the side of the sugar-energy sector, which is pressuring Planalto to maintain protective tariffs on North American ethanol.
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“We are going to supply the ethanol that will power the vessels. This means that there is an extraordinary demand and we do not need to make concessions on what is Brazil’s strategic reserve”, said Tarcísio, according to a report obtained by the newspaper The Globe.
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“We have to protect this reserve. We need to honor those who invest in technology and make a difference in the field”, added the governor.
Context of the dispute
Tarcísio’s speech comes after rumors that the Brazilian government was considering reducing the 18% import tariff on US ethanol as part of a negotiation to mitigate Trump’s retaliatory measures.
Sector giants and the Sugarcane and Bioenergy Industry Union (Unica), however, deny any negotiations with the federal government in this regard.
In a statement, the entity stated that it maintains “a unified position in defense of regulatory predictability, commercial reciprocity and respect for international trade rules”.
“Brazilian ethanol is a strategic asset of national sovereignty — and cannot be treated as a bargaining chip in commercial negotiations,” says the statement.
Opening resistance
The sector’s resistance is linked to the different production model between the two countries.
While Brazil produces ethanol from sugar cane, the United States uses corn, with strong government subsidies, which artificially reduces costs and unbalances international competition.
For the sugar-energy sector, maintaining the 18% tariff is essential to protect the competitiveness of the national product and guarantee predictability in the biofuels market, which accounts for around 20% of the Brazilian energy matrix.
Tariff war
Tarcísio’s statements are part of the trade war opened by Trump against Brazil, which included tariffs of up to 50% on Brazilian agricultural and manufactured products.
The Lula (PT) government has sought a coordinated response with the private sector, avoiding an immediate escalation, but maintaining a firm tone in diplomatic negotiations.
