Bush Admin. Says Talk of Tariff “not under negotiation”

This week, President Bush will be traveling to Brazil to meet with Brazilian President Luiz Inacio Lula da Silva to discuss a proposed ethanol initiative between the two countries.  One topic about which Brazilian leaders have been complaining loudly is the secondary tariff on imported ethanol.  The Brazilian president and other officials have claimed it acts to block imports of Brazilian ethanol into the U.S.  Nothing could be further from the truth.  In 2006 alone, more than 430 million gallons of Brazilian ethanol was imported, representing two-thirds of total imports. 

During a preview of the president’s visit to Brazil, U.S. National Security Adviser Stephen Hadley told reporters that discussion of tampering with or removing the secondary tariff was “not under negotiation.”

Because the tariff acts simply to offset the tax incentive for which Brazilian and all foreign ethanol is eligible, President Lula da Silva’s complaints must stem from a desire to gain access to the wallets of American taxpayers to support a Brazilian industry that has received heavy government support for more than 30 years.