It is reported by datamarnews.
Currently, Brazil has a preferential sugar export quota of 146,600 tonnes exempt from U.S. import taxes, allocated among 39 companies in the country’s northeastern region. For several years, the government has sought to increase this quota to between 300,000 and 400,000 tonnes but has faced resistance. It is unclear whether the latest request remains within that range.
In 2024, Brazil exported 876,700 tonnes of sugar to the U.S., generating nearly $440 million in revenue. Any amount exceeding the quota is subject to an import tax of about 80%. Produced in 26 U.S. states, sugar is considered a “highly protected” commodity, making negotiations particularly challenging, according to sources in Brasília.
Government analysts argue that sugar is directly tied to ethanol — an area where the U.S. is seeking greater access to the Brazilian market — providing a possible justification for approving the quota expansion. «In Brazil, ethanol and sugar are inseparable», — one source said, noting that most of the country’s biofuel is derived from sugarcane. In contrast, U.S. ethanol is produced from corn, which U.S. negotiators argue affects different industries when discussing an expanded sugar quota.
The matter was already discussed in a videoconference between Vice President Alckmin and U.S. Secretary of Commerce Howard Lutnick. During the meeting, Brazil proposed creating a working group to address bilateral trade relations.
«The strategy is to secure some kind of leverage in ethanol negotiations in case Brazil moves toward a tariff reduction», — a government source said. Expanding the sugar quota would serve as a form of “compensation,” the source added.
In an interview with Rádio CBN on Monday, Mr. Alckmin, who is also Brazil’s minister of development, industry, trade, and services, pointed out that sugar is one of the Brazilian products facing high U.S. tariffs. «The U.S. import tax on ethanol is 2.5%, while ours is 18%. That’s true. But when it comes to sugar, they grant a small quota for Brazil, and anything above that is taxed at nearly 90%», — he said.
The specifics of the negotiation process remain undefined. One potential solution could be a deal in which Brazil opens a duty-free quota for U.S. ethanol in exchange for an expanded sugar quota.
