Trump Doesn’t Get Brazil Deal For Iowa, Ethanol Tariff Reinstated (For Now)

Donald Trump wanted Brazil to hold off on an ethanol tariff so bad, his administration may well have committed another crime in foreign election interference to convince them. Brazil didn’t listen.

On Tuesday, the country decided to let a tariff-free quota lapse, causing a 20% tariff on ethanol coming into the country to be reinstated. It will deal another blow to U.S. ethanol producers.

Preventing the tariff was a key goal for the Trump Administration, as they knew it could hurt farmers in Iowa. Those farmers have already been frustrated by anti-biofuel decisions made under Trump.

It’s alleged that U.S. Ambassador to Brazil Todd Chapman “made it clear to Brazilian officials they could bolster Mr. Trump’s electoral chances in Iowa if Brazil lifted its ethanol tariffs,” triggering an investigation by the U.S. House. Brazil President Jair Bolsonaro looks up to Trump and has been trying to find ways to improve relations between the two nations.

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The inability to make the deal very well could deal one more blow to Trump’s standing with corn producers. The EPA’s constant approval and review of small refinery waivers for oil companies has greatly undermined the biofuels industry, taking billions of gallons of ethanol out of production. That has caused several Iowa ethanol plants to shut down.

But there’s other reports that Brazil may yet change it’s mind.

“A day after letting it lapse, Brazil is considering reapplying a tariff-free quota on American ethanol imports for 90 days in a show of goodwill to President Donald Trump ahead of U.S. elections, people with knowledge of the matter said,” Bloomberg reported.

And as Reuters reported, the possible deal that Brazil may offer to the U.S. is only a three-month reinstatement of the tariff — enough to help Trump through the November election, but not the kind of deal that would help U.S. farmers in the long-term. The report noted that Brazil’s own agriculture lobby is pushing for Bolsonaro to “get something in return” if he does help Trump.

Complicating matters here is that Brazil is upset over the U.S. pulling back on Brazil’s quota for semi-finished steel exports in order to help the steel industry in other U.S. swing states.

All of it offers up yet another complication for Trump in his effort to repeat his victory in Iowa, where huge margins in rural counties gave him the edge over Hillary Clinton. And it gives another opportunity for Joe Biden to make his case to rural voters.

Although Iowa Republicans have attempted to portray Democratic candidates’ environmental policies as radical and anti-farmer, Biden himself has been talking about biofuels for well over a year on the campaign trail. And his new statements put out since his selection of Kamala Harris as his running mate made clear his pledge to support farmers and ethanol producers.

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Just this past month, Biden released a statement of his commitment to the RFS and stated his opposition to the small refinery waivers. That had been a sticking point with some farmers and him in the past.

“Instead of standing with those who till our land and sow our fields, we have a president who has sold out our farmers by undercutting the Renewable Fuel Standard with the granting of waivers to Big Oil,” he said at the time.

Biden also visited Big River Resources Plant, a Growth Energy ethanol plant in Dyersville, last October, to talk with and learn from local producers about the issue. Tom Vilsack and Patty Judge accompanied him there, along with Growth Energy.

Biden visits with Tom Vilsack, Patty Judge, Majda Olson of Growth Energy and Jim Leiting, CEO of the plant.

“A Biden-Harris Administration will promote and advance renewable energy, ethanol, and other biofuels to help rural America and our nation’s farmers, and will honor the critical role the renewable fuel industry plays in supporting the rural economy and the leadership role American agriculture will play in our fight against climate change,” Biden said in his recent August statement.

As Reuters noted, it was the “strongest commitment the Biden campaign has made to the Renewable Fuel Standard (RFS) yet.”

 

by Pat Rynard
Posted 9/3/20

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