The August 31st expiry of the tariff-free quota (TFQ) for U.S. ethanol imported into Brazil has passed without a decision on imposing the 20 percent duty.  According to The Progressive Farmer, a possible agreement might be negotiated as a temporary measure until a more comprehensive bilateral trade pact is concluded.

Imposition of a 20 percent tax on U.S. ethanol would be yet another blow to the beleaguered ethanol industry that underwent a 30 percent decline in exports during July.  The Renewable Fuels Association ascribed this to the "spread of protectionist trade barriers around the globe impacting demand for U.S. ethanol.

In response to the expiry of the TFQ the Administration noted that reciprocal tariffs will be imposed on Brazil unless the duty remained in abeyance.  A tariff war as we have experienced would be mutually destructive.  The solution to a trade dispute is through diplomacy and establishing positive programs that can benefit both nations.  The biblical approach of an eye-for-an eye- and a tooth-for-a-tooth will result in blind and toothless parties.