Is the U.S. import tariff on Brazilian ethanol justifiable?

Stephen Devadoss, Martin Kuffel

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

The United States has used tax credits and mandates to promote ethanol production. To offset the tax credits received by imported ethanol, the United States instituted an import tariff. This study provides insights about the quantitative nature of a U.S. trade policy that would establish a free-market price for ethanol, given the U.S. ethanol mandate and tax credit. The theoretical results from a horizontally related ethanol-gasoline partial equilibrium model show that the United States should provide an import subsidy rather than impose a tariff. The empirical results quantify that this import subsidy is 9 cents, instead of a 57 cent import tariff, per gallon of ethanol.

Original languageEnglish
Pages (from-to)476-488
Number of pages13
JournalJournal of Agricultural and Resource Economics
Volume35
Issue number3
StatePublished - Dec 2010

Keywords

  • Ethanol imports
  • Mandate
  • Subsidy
  • Tariff
  • Tax credit

Fingerprint Dive into the research topics of 'Is the U.S. import tariff on Brazilian ethanol justifiable?'. Together they form a unique fingerprint.

Cite this