Tariff Shockwaves: Biofuels Outlook One Week After Liberation Day

One week after 'Liberation Day,' the policy pendulum in Washington continues to swing abruptly, and with it, the global biofuels complex. The Trump administration announced that tariffs on Chinese goods will jump to 125% on Wednesday—up from 104% today and from just 20% on Tuesday. This sudden escalation compounds market uncertainty and is already affecting forward contract discussions, particularly for imported feedstocks like UCO, palm oil derivatives, and soybean oil.

Additionally, a baseline 10% tariff will be imposed on imports from all countries except Russia, North Korea, and Belarus, effective for the next 90 days. While this is a blanket measure, it has already triggered reevaluations across trading desks globally. Tariffs on steel, aluminum, and imported automobiles remain at 25%, raising concerns for cost inflation across biofuel infrastructure and transport chains.

One key exception is Canada. The White House confirmed today that no baseline 10% tariff will be applied to Canadian imports—a decision consistent with U.S. trade messaging from early April. This is excellent news for the U.S. biofuels sector, which relies on Canadian canola and tallow as key feedstocks for both biodiesel and renewable diesel. It also preserves stability in ethanol exports by avoiding retaliatory action from Ottawa.