India's US ethanol ban flagged by USTR as major 'unfair trade practice'

United States Trade Representative lists unfair trade practices across several nations, flags India's ethanol import ban among key barriers affecting US exporters

The United States Trade Representative (USTR) has flagged several international trade practices it considers discriminatory towards American exporters, including India’s ban on US ethanol imports. 

This development follows a recent meeting between US Secretary of State Marco Rubio and Indian External Affairs Minister Subrahmanyam Jaishankar, focused on promoting a ‘fair and balanced’ trade relationship.

 

USTR outlined ten key concerns affecting US trade interests:

1. India and Thailand – Ethanol import barriers  

India maintains a ban on US ethanol imports for fuel use. Likewise, Thailand requires special permits for fuel ethanol imports and hasn’t issued any since 2005. Opening these markets could boost US ethanol exports by an estimated $414 million annually. 

  2. Chinese-made American flags

Over 100,000 Chinese-manufactured US flags are sold every month on a single e-commerce platform, costing domestic producers around $2 million in lost revenue and leading to job losses and closures in the flag-making industry.

 

3. Angola – Meat import restrictions

Starting July 31, 2025, Angola plans to impose limitations on import licences for beef, pork, and poultry. In 2024, US poultry exports to Angola — its largest market in Africa — were valued at $136 million, and these changes may negatively affect American producers.

 

4. Japan – Tariffs on seafood  

Japan imposes tariffs up to 10.5 per cent on US seafood and enforces a complicated quota system. These policies are estimated to reduce US seafood export potential by $189 million annually.

 

5. EU – Deforestation-free regulation  

The European Union’s Deforestation-Free Supply Chain Regulation targets imports like cattle, cocoa, and wood. US exporters must now comply with strict due diligence and tracking measures, potentially impacting $8.6 billion in annual trade.

 

6. EU – Carbon Border Adjustment Mechanism (CBAM)  

CBAM introduces costly verification processes for imports based on carbon emissions. It could disadvantage US exporters against competitors in countries with weaker environmental standards, affecting roughly $4.7 billion in trade.

 

7. South America – Illegal mining and logging  

Unregulated activities in Brazil, Colombia, Peru, and Ecuador distort global markets, harming American companies that follow environmental laws and ethical sourcing practices.

 

8. Algeria – Pharmaceutical trade barriers  

Algeria restricts imports of generic medicines and medical devices, limiting access for US healthcare exporters and reducing competitiveness.

 

9. Kenya – High corn tariffs  

Kenya imposes a 50 per cent tariff and other regulatory hurdles on US corn imports. The current $50 million market has potential to grow 30 per cent by 2027 if barriers are eased.

 

10. Nigeria – Broad import bans  

Nigeria prohibits the import of 25 categories of products, including several key US exports like beef, pharmaceuticals, and beverages, hindering market access and trade growth.

 

India-US bilateral trade agreement

Jaishankar and Rubio, during a phone conversation on Monday, emphasised the importance of finalising the proposed India-US bilateral trade agreement at the earliest. This discussion came shortly after US President Donald Trump announced reciprocal tariffs on approximately 50 nations, including India. 

The phone call marked the first high-level interaction between the two nations following Trump’s tariff announcement on April 2. Jaishankar, in a post on X, noted that both sides “agreed on the importance of the early conclusion of the bilateral trade agreement”. 

He also mentioned that he and Rubio discussed various regional and global developments. “Good to speak with @SecRubio today. Exchanged perspectives on the Indo-Pacific, the Indian subcontinent, Europe, Middle East/West Asia and the Caribbean,” Jaishankar posted. 

“Agreed on the importance of the early conclusion of the bilateral trade agreement. Look forward to remaining in touch,” he mentioned. 

This exchange follows discussions between Prime Minister Narendra Modi and President Trump in Washington DC in February, where both leaders committed to concluding the first tranche of the trade deal by fall 2025. In a related development, US Assistant Trade Representative Brendan Lynch visited India last month to continue talks on the trade pact.