Produtos químicos
10/04/25
New tariffs could upend US tallow imports: Correction
Corrects description of options for avoiding feedstock tariffs in 12th
paragraph. Story originally published 3 April. New York, 10 April (Argus) — New
US tariffs on nearly all foreign products could deter further imports of beef
tallow, a fast-rising biofuel feedstock and food ingredient that had until now
largely evaded President Donald Trump's efforts to reshape global trade. Tallow
was the most used feedstock for US biomass-based diesel production in January
for the first month ever, with consumption by pound rising month to month
despite sharp declines in actual biorefining and in use of competing feedstocks.
The beef byproduct benefits from US policies, including a new federal tax credit
known as "45Z", that offer greater subsidies to fuel derived from waste than
fuel derived from first-generation crops. Much of that tallow is sourced
domestically, but the US also imported more than 880,000t of tallow last year,
up 29pc from just two years earlier. The majority of those imports last year
came from Brazil, which until now has faced a small 0.43¢/kg (19.5¢/lb) tariff,
and from Australia, which was exempt from any tallow-specific tariffs under a
free trade agreement with US. But starting on 5 April, both countries will be
subject to at least the new 10pc charge on foreign imports. There are some
carveouts from tariffs for certain energy products, but animal fats are not
included. Some other major suppliers — like Argentina, Uruguay, and New Zealand
— will soon have new tariffs in place too, although tallow from Canada is for
now unaffected because it is covered by the US-Mexico-Canada free trade
agreement. Brazil tallow shipments to the US totaled around 300,000t in 2024,
marking an all-time high, but tallow shipments during the fourth quarter of 2024
fell under the 2023 levels as uncertainty about future tax policy slowed buying
interest. Feedstock demand in general in the US has remained muted to start this
year because of poor biofuel production margins, and that has extended to global
tallow flows. Tallow suppliers in Brazil for instance were already experiencing
decreased interest from US producers before tariffs. Brazil tallow prices for
export last closed at $1,080/t on 28 March, rising about 4pc year-to-date amid
support from the 45Z guidance and aid from Brazil's growing biodiesel industry,
which is paying a hefty premium for tallow compared to exports. While the large
majority of Brazilian tallow exports end up in the US, Australian suppliers have
more flexibility and could send more volume to Singapore instead if tariffs
deter US buyers. Export prices out of Australia peaked this year at $1,185/t on
4 March but have since trended lower to last close at $1,050/t on 1 April. In
general, market participants say international tallow suppliers would have to
drop offers to keep trade flows intact. Other policy shifts affect flows Even as
US farm groups clamored for more muscular foreign feedstock limits over much of
the last year, tallow had until now largely dodged any significant restrictions.
Recent US guidance around 45Z treats all tallow, whether produced in the US or
shipped long distances to reach the US, the same. Other foreign feedstocks were
treated more harshly, with the same guidance providing no pathway at all for
road fuels from foreign used cooking oil and also pinning the carbon intensity
of canola oil — largely from Canada — as generally too high to claim any
subsidy. But tariffs on major suppliers of tallow to the US, and the threat of
additional charges if countries retaliate, could give refiners pause. Demand
could rise for domestic animal fats or alternatively for domestic vegetable oils
that can also be refined into fuel, especially if retaliatory tariffs cut off
global markets for US farm products like soybean oil. There is also risk if
Republicans in the Trump administration or Congress reshape rules around 45Z to
penalize foreign feedstocks. At the same time, a minimum 10pc charge for tallow
outside North America is a more manageable price to pay compared to other
feedstocks — including a far-greater collection of charges on Chinese used
cooking oil. And if the US sets biofuel blend mandates as high as some oil and
farm groups are pushing , strong demand could leave producers with little choice
but to continue importing at least some feedstock from abroad to continue making
fuel. Not all US renewable diesel producers will be equally impacted by tariffs
either. Some tariffs are eligible for drawbacks, meaning that producers could
potentially recover tariffs they paid on feedstocks for fuel that is ultimately
exported. And multiple biofuel producers are located in foreign-trade zones, a
US program that works similarly to the duty drawbacks, and have applied for
permission to avoid some tariffs on imported feedstocks for fuel eventually
shipped abroad. Jurisdictions like the EU and UK, where sustainable aviation
fuel mandates took effect this year, are attractive destinations. And there is
still strong demand from the US food sector, with edible tallow prices in
Chicago up 18pc so far this year. Trump allies, including his top health
official, have pushed tallow as an alternative to seed oils. By Cole Martin and
Jamuna Gautam Send comments and request more information at
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