The return of the tariffs: What’s happening in global trade?

The return of tariffs is more than a headline. It’s a signal. Around the world, governments are reintroducing trade barriers to protect domestic industries, respond to political pressure, or advance climate-linked agendas.

From fuel to steel, and sugar to coffee, global commodities are once again caught in the crossfire of protectionism. As trade becomes more fragmented and policy-driven, ethanol sits right in the middle of it. Tied to agricultural policy, energy security, and climate targets, it’s feeling the effects firsthand through import restrictions, sustainability-linked regulations, and shifting origin rules. For buyers and suppliers, the result is clear: more complexity, less predictability.

In conversations with our traders and logistics teams, these shifts aren’t abstract. They’re showing up in sourcing calls, documentation demands, and delivery timelines.

So, what’s actually happening out there? How are different regions responding to the return of tariffs and trade barriers? What role are new regulations and political tensions playing in redrawing global trade routes? And why should buyers of ethanol, in particular, pay attention now?

In the next section, we take a closer look at how key markets are responding and what that means for ethanol buyers in practice.

European Union: Tightening standards and trade defences

• RED III targets: The EU’s Renewable Energy Directive III (RED III) mandates a 29% share of renewable energy in transport by 2030, with sub-targets including 5.5% for advanced biofuels. This raises the demand for compliant ethanol and intensifies sustainability and traceability requirements.
• Tariffs on Chinese biofuels: The EU has imposed anti-dumping duties on certain ethanol-related imports, notably a 10% to 35.6% tariff on biodiesel from China, to protect domestic producers from unfair pricing practices.
• Are Pakistan’s ethanol privileges at risk?: The EU launched a formal consultation under the Generalised Scheme of Preferences (GSP) to assess whether the sharp increase in ethanol imports from Pakistan was distorting the market. Between 2020 and 2023, imports from Pakistan rose by 167%, with a peak in 2022 when Pakistan accounted for 25% of total EU ethanol imports. While stakeholder consultations have taken place, the Commission has not yet announced a final decision, and preferential tariff treatment remains in place for now.
• EU ethanol faces a profit squeeze: EU ethanol producers are facing rising costs due to a weak 2024–25 harvest season, especially for wheat and corn, which has pushed up feedstock prices. Meanwhile, tightened GHG emission thresholds and RED III compliance requirements are compounding the pressure on pricing and profitability across the continent.
• EU–US clash on climate compliance: While no direct ethanol tariffs have been introduced, carbon standards and green subsidy tensions, including the US Inflation Reduction Act, continue to complicate transatlantic trade alignment, particularly around sustainability compliance and mutual recognition of standards.

United States: 'America first' returns and so do trade barriers

• 10% on all imports under review: The Trump administration has implemented a 10% baseline tariff on nearly all imports, effective April 5, 2025. The sweeping move marks a significant return to protectionist policy and has triggered concern across global commodity markets — including ethanol and bulk spirits — as companies scramble to assess the impact on pricing, sourcing, and compliance.
• The US abandons WTO trade norms, China hit with 84% tariffs: In a major policy shift, the US has moved away from World Trade Organization (WTO) rules and is now matching the tariffs other countries impose on American goods. As of April 9, tariffs on Chinese imports jumped from 34% to 84% raising the stakes in an already tense trade relationship and prompting China to respond with 125% duties on select U.S. goods, a move that could spill over into sectors like ethanol and agri-commodities.
• Tensions with Brazil grow: The US is considering new ethanol tariffs on Brazil to match Brazil’s 18% duty on U.S. exports, risking disruption between two major global ethanol producers.
• Less ethanol left for export (E15 + Biofuel Mandates): The U.S. has raised its national biofuel targets for 2025, with a significant share going to ethanol. At the same time, fuel with a higher ethanol blend (E15) is now approved for year-round sale in eight Midwestern states. These changes are expected to boost domestic consumption, potentially leaving less ethanol available for export.
• Bulk spirits caught in crossfire: While ethanol isn’t directly targeted (yet), the U.S. spirits industry remains exposed. The EU’s 25% retaliatory tariff on American whiskey is suspended but could double to 50% if steel trade talks fail.

Brazil: Record ethanol production and shifting trade routes

• Ethanol production hits a new high: Brazil produced a record 36.83 billion litres of ethanol in 2024 — up 4.4% from the year before. The Center-South region led the way, with output up 8.9% year on year. While sugarcane is still the main feedstock, corn ethanol is catching up fast. It made up 20.9% of total production last year, driven by new capacity in the central-west. This growth is attributed to new production capacities in the central-west region, highlighting a significant shift in Brazil's ethanol industry .​
• The EU opens the door, the US closes it: A new EU-Mercosur trade agreement, signed in late 2024, is expected to boost Brazil’s ethanol exports to Europe. The deal includes reduced tariffs and streamlined sustainability certification requirements. Meanwhile, trade with the US is going in the opposite direction. Brazil maintains an 18% import duty on U.S. ethanol — a longstanding point of friction — and in April 2025, the U.S. government responded with a 10% reciprocal tariff on Brazilian products. This has effectively shut the door on Brazilian ethanol exports to the U.S., which were already at historically low levels.

Middle East: Growing demand with trade and policy shifts

• Growing ethanol market, but barriers remain: Ethanol demand in the Middle East is steadily climbing, with consumption reaching 554 million litres in 2024, up 10% from the year before. Turkey, the UAE, and Saudi Arabia account for 90% of the total, driven by industrial applications and a gradual shift toward cleaner fuels. But despite rising demand, access is far from straightforward. The UAE, for example, restricts ethanol imports to industrial uses only, with strict documentation and prior approvals required.
• The US tariffs reshape the playing field: The US has introduced 10% baseline tariff on imports from most countries — including key Middle Eastern markets like the UAE and Saudi Arabia. Jordan and Iraq were hit even harder, facing tariffs of up to 20% and 39%. For regional exporters, these changes complicate access to the U.S. and reinforce the need to diversify trade lanes.
• Middle East’s strategic positioning, but with conditions: Geographically, the Middle East is well-positioned to become a global trade hub especially as companies rethink routes amid the US-China tensions. But capitalising on that potential will require more than a map. Regulatory complexity, patchwork infrastructure, and shifting compliance regimes still pose a challenge for anyone looking to scale supply chains in or through the region.

India: Domestic demand rises, leaving less ethanol for export

• Blending targets tighten ethanol export supply: India achieved its 20% ethanol blending target in petrol by March 2025, five years ahead of schedule. The government has now raised its ambition, setting a new target of 30% blending by 2030. This aggressive domestic push means less ethanol is available for export, and global buyers should expect tighter international supply and increased price volatility.
• Corn imports rise as grain-based ethanol faces cost pressure: To meet its expanded blending targets, India has shifted from being a top corn exporter to a net importer. Corn imports are estimated to reach 1 million tons in 2024, primarily from Myanmar and Ukraine. At the same time, rising global grain prices are making ethanol production less viable for some local producers, adding uncertainty to future volumes.
• Sugar diverted, exports restricted: 14.7% drop in sugar output is expected this season, with more cane going to ethanol. To protect domestic supply, India has extended a ban on sugar exports .

China: Trade barriers remain high, demand stays limited

• China’s ethanol market stays close: China continues to impose up to 45% tariffs on ethanol imports, effectively closing the market to most foreign suppliers. Ongoing tensions with the U.S. also remain a major barrier, with China maintaining anti-dumping duties on key U.S. chemical imports. However, in April 2025, Chinese officials indicated they may lift tariffs on select U.S. goods, including medical equipment and industrial components to ease pressure on domestic firms. The US-China trade talks have also quietly resumed, offering a potential path toward reduced tensions.
• Brandy tariffs deepen EU – China rift: In October 2024, China imposed provisional anti-dumping duties of 30.6% to 39% on EU brandy imports, predominantly affecting French Cognac producers. This move is widely seen as retaliation against the EU's tariffs on Chinese electric vehicles.
• Blending targets quietly scaled back: China's initial plan for nationwide E10 petrol by 2020 has been shelved. As of 2025, blending mandates are limited to select provinces, with the country focusing more on electric vehicle adoption and food security.
• Domestic production favoured over imports: High corn prices and policy support for local supply chains have led China to maintain a self-sufficient market stance. Ethanol imports remain marginal, with approximately 5 million litres expected in 2025, a negligible share of global trade.

Africa: The US tariffs disrupt trade, strategic shifts on horizon?

• AGOA under threat: The African Growth and Opportunity Act (AGOA), which provides duty-free access to the U.S. market for qualifying African countries, is facing uncertainty. President Trump’s recent tariffs, including a 30% duty on South African imports, have raised doubts about renewal ahead of its September 2025 expiry.
• US tariffs threaten key South African exports: South Africa’s automotive and citrus industries — both major U.S. exporters — face tariffs of 25–30%, threatening over $1.3 billion in trade and tens of thousands of jobs.
• Nigeria and Kenya hit by new duties: Nigeria now faces a 14% tariff, and Kenya a 10% duty, under Trump’s “Liberation Day” tariffs which impose baseline import duties across the board, with higher rates for select countries.

Southeast Asia: Caught between U.S. tariffs and regional realignment

• Tariffs spark diplomacy, not retaliation: Southeast Asian countries like Vietnam, Cambodia, and Indonesia are facing U.S. tariffs of up to 49%. In response, Vietnam reduced tariffs on U.S. goods, while ASEAN chose not to retaliate, calling for dialogue and stability.
• China steps in to fill the vacuum: As U.S. tensions grow, China is reinforcing regional influence. President Xi’s April 2025 visits to Malaysia, Vietnam, and Cambodia signal a shift toward deeper trade alignment.
• Blending ambitions, limited import access: Despite blending targets — 20% in the Philippines, 5–20% in Indonesia and Thailand, the region remains largely closed to foreign ethanol. High tariffs and protectionist policies continue to restrict imports.

Q2–Q3 Outlook: Impact on ethanol supply chains

For companies sourcing bulk ethanol or spirits, today’s tariff landscape isn’t just noise, it’s redrawing trade routes and reshaping how global supply moves.

Prices may fluctuate week to week, but the bigger risks now lie in last-minute tariffs, customs slowdowns, and tightening sustainability and origin checks. Supply chains that used to run in the background now demand agility, foresight, and the right partners.

At Nedstar, we’re seeing more companies rethink their sourcing strategy: from diversifying origin risk to building in timeline flexibility and navigating compliance proactively. It’s not about reacting. It’s about planning forward with backup routes and policy-aware decision-making.

What to look for in uncertain times

• Market insight: A supplier who can flag disruptions before they hit.
• Flexible logistics: Multiple origin and routing options, not one fixed plan.
• Compliance fluency: Documentation, sustainability, and traceability baked into the process.

Trade lanes will shift, rules are changing, but the right information and the right people will make all the difference when the map changes.

What to watch in Q2 and Q3?

• Tariff escalations: With US-China and the US–Brazil tensions rising, and the U.S. 10% tariff now in effect, we can expect further retaliations.
• The US protectionist policy: The April implementation of universal tariffs marks a major break from the WTO norms and will affect sourcing costs globally.
• Elections & trade reviews: India’s elections and the upcoming AGOA expiry (September) could shift market access in Asia and Africa.
• Seasonal supply shifts: Brazil’s sugarcane harvest and India’s monsoon may further tighten feedstock availability.
• Regulatory enforcement: GHG thresholds and sustainability claims are facing greater scrutiny under EU RED III and global ESG trends.

Agility has become the baseline in supply chain. It’s no longer just about price. Buyers now need partners who understand the risks behind every route, can navigate shifting paperwork and port policies, and keep things moving when trade maps are redrawn.

And if you're wondering what that kind of flexibility looks like in practice — we’ll go deeper in next month’s podcast with Nedstar’s Head of Logistics, as we unpack how supply chains are adapting on the ground. Pre-sign up for our podcast by filling out this form and get NedTalks, our new podcast series, directly in your inbox!