<p>The United States and Brazil said Friday they had reached a deal for the South American country to temporarily resume tariff-free ethanol imports, a political win for President Donald Trump.</p>.<p>Ethanol is a key agricultural export for Iowa, a battleground state in the upcoming US election, and the Trump administration had lobbied to retain zero-tariff access to Brazil, a leading market.</p>.<p>Brazil had previously exempted up to 750 million litres (200 million gallons) a year of imported ethanol from tariffs.</p>.<p>However, it let the benefit expire on September 1, reinstating a 20-per cent tariff.</p>.<p>In a joint statement, the two countries said they had agreed to hold trade talks for a 90-day period starting September 14 and return to the previous tariff-free arrangement during that time.</p>.<p>The talks will focus on ethanol, sugar -- which Brazilian producers want to sell tariff-free in the US -- and possibly corn, the two sides said.</p>.<p>"The discussions should aim to achieve reciprocal and proportional outcomes that generate trade and open markets to the benefit of both countries," they said.</p>.<p>The US ambassador in Brazil, Todd Chapman, has reportedly lobbied hard to retain the ethanol exemption.</p>.<p>Chapman is now facing an inquiry before the US House of Representatives' Foreign Affairs Committee over reports he violated a law barring federal officials from engaging in partisan activities by telling Brazilian counterparts that a renewal of the ethanol exemption would help Trump's re-election chances.</p>.<p>Brazilian President Jair Bolsonaro has sought to cultivate a close relationship with Trump, whom he openly admires.</p>.<p>But Bolsonaro also faces a powerful agricultural lobby at home.</p>.<p>Ethanol is big business for sugarcane producers in Brazil, who are pushing for tariff-free access to the US sugar market.</p>.<p>Brazil and the United States lead the world in ethanol production, together accounting for nearly 85 per cent of supply.</p>.<p>Brazil's ethanol is mostly made from sugar, while US ethanol mostly comes from corn.</p>.<p>Both countries' producers face slumping fuel demand at home because of the coronavirus pandemic and are keen to boost exports.</p>.<p>The US exported more than 1.25 billion litres of ethanol to Brazil last year and imported 738 million litres of Brazilian ethanol.</p>
<p>The United States and Brazil said Friday they had reached a deal for the South American country to temporarily resume tariff-free ethanol imports, a political win for President Donald Trump.</p>.<p>Ethanol is a key agricultural export for Iowa, a battleground state in the upcoming US election, and the Trump administration had lobbied to retain zero-tariff access to Brazil, a leading market.</p>.<p>Brazil had previously exempted up to 750 million litres (200 million gallons) a year of imported ethanol from tariffs.</p>.<p>However, it let the benefit expire on September 1, reinstating a 20-per cent tariff.</p>.<p>In a joint statement, the two countries said they had agreed to hold trade talks for a 90-day period starting September 14 and return to the previous tariff-free arrangement during that time.</p>.<p>The talks will focus on ethanol, sugar -- which Brazilian producers want to sell tariff-free in the US -- and possibly corn, the two sides said.</p>.<p>"The discussions should aim to achieve reciprocal and proportional outcomes that generate trade and open markets to the benefit of both countries," they said.</p>.<p>The US ambassador in Brazil, Todd Chapman, has reportedly lobbied hard to retain the ethanol exemption.</p>.<p>Chapman is now facing an inquiry before the US House of Representatives' Foreign Affairs Committee over reports he violated a law barring federal officials from engaging in partisan activities by telling Brazilian counterparts that a renewal of the ethanol exemption would help Trump's re-election chances.</p>.<p>Brazilian President Jair Bolsonaro has sought to cultivate a close relationship with Trump, whom he openly admires.</p>.<p>But Bolsonaro also faces a powerful agricultural lobby at home.</p>.<p>Ethanol is big business for sugarcane producers in Brazil, who are pushing for tariff-free access to the US sugar market.</p>.<p>Brazil and the United States lead the world in ethanol production, together accounting for nearly 85 per cent of supply.</p>.<p>Brazil's ethanol is mostly made from sugar, while US ethanol mostly comes from corn.</p>.<p>Both countries' producers face slumping fuel demand at home because of the coronavirus pandemic and are keen to boost exports.</p>.<p>The US exported more than 1.25 billion litres of ethanol to Brazil last year and imported 738 million litres of Brazilian ethanol.</p>