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Brazilian Finance Minister Fernando Haddad announced that the government is preparing for extensive tariff negotiations with the United States and discussing preparations including key trade issues surrounding sugar and ethanol. According to Reuters, Haddad stressed the complexity of the negotiations and emphasized the wider U.S. trade conflict.

Also read: Under pressure from tariff issues, the U.S. market

Brazil’s Energy and Mining Minister Alexandre Silveira believes that potential U.S. tariffs on Brazilian ethanol are considered unreasonable, which points to the historical context of negotiations on ethanol and sugar trade between the two countries. Brazil is the world’s leading sugar producer, mainly from sugar cane ethanol, in sharp contrast to corn-based ethanol production in the United States.

Indexbox data shows that Brazil’s sugar exports are a key component of its trade portfolio, and any changes in tariffs could have a significant impact on the industry. Brazilian officials believe that the U.S. tariffs on sugar imports (more than Brazil’s tariffs on ethanol imports) are disproportionate.

Minister Haddad said that service exchanges in which the United States is an important exporter may also become the focus of negotiations compared to Brazil. He reiterated Brazil’s strategy of seeking reciprocity rather than retaliation in trade negotiations and comprehensively reviewed Brazil’s ongoing import and export agenda.

Source: Index Box Market Intelligence Platform