Recent ethanol tariffs hikes imposed by the Chinese government could have potentially devastating effects on Illinois’ ethanol producers and the corn farmers who supply them.
The Chinese Ministry of Finance announced in December that it planned to raise imports tariffs on ethanol and dried grains, among other commodities. Grain crop imports tariffs are expected to double from 40 percent to 80 percent while ethanol tariffs are rising from 5 to 30 percent.
Jason Marquis, chief operating officer at Hennepin based Marquis Energy, said adding tariffs is a prime example of the type of trade agreements that hurt American businesses.
“These tariffs are the poster child of bad trade deals,” he said.
Marquis believes the deal will cause massive and widespread uncertainty in the export market to China.
“The impact has been the initial disruption caused by the widespread uncertainty in the export market to China,” he said. “We were essentially in limbo waiting for definitive direction in regards to policy from Beijing.”
According to the U.S. Census Bureau data, China is the third largest buyer of U.S. ethanol, purchasing nearly 200 million gallons of the more than 950 million gallons produced in 2016. Marquis asserted that the leaders of ethanol-producing states need to rally around local producers and send a message to President Trump.
“States can rally with support of their local farmers and leading ethanol producers to deliver a powerful message to the Trump administration that this is a clear result of an unfair trade deal putting America last,” he said.
Marquis added that, with the amount of red tape involved with settling international trade, he is hopeful the Trump administration will take immediate action and intervene.
“Marquis Energy and U.S. farmers are hopeful that the new Trump administration will immediately take up the issue of these tariffs directly to China,” he said.
U.S. Census Bureau data show the U.S. is on track to produce record amounts of ethanol in 2017.
–Illinois News Network