White House Responds to Brazilian Tariff Questions
Ethanol groups expressed concern and Senator Chuck Grassley (R-IA) called for clarification this week on the White House’s position regarding the U.S. tariff on imported ethanol after a statement in favor of lifting the tariff was made by the President’s nominee for ambassador to Brazil.
During his confirmation process, ambassador nominee Thomas Shannon said that removing the tariff would be “beneficial,” however as the official voice of the United States in Brazil, Shannon also stated that he will support the position of the Obama Administration.
“As a senator and as a presidential candidate, President Obama supported keeping the U.S. tariff on imported ethanol,” Grassley said. “It’s important to know whether the Administration’s position has changed before this nomination goes forward.”
In response, the White House issued a statement yesterday regarding the administration’s position on the ethanol tariff:
“The Obama Administration is committed to developing our domestic biofuels industry, and to help the international market for biofuels grow. Biofuels are an important renewable energy resource, which will help diversify our energy matrix and reduce our dependence on imported oil. Regarding the U.S. tariff on Brazilian ethanol, the administration has no plans to change it.”
Both the Renewable Fuels Association and Growth Energy expressed concern and confusion over Shannon’s statements. “During his tenure in the U.S. Senate and as a presidential candidate, President Obama has been a strong supporter of America’s evolving ethanol industry,” said RFA President Bob Dinneen. “Removing the tariff would have a chilling impact on the development of next generation technologies and unfairly require Americans to subsidize foreign industry.”
Growth Energy CEO Tom Buis was pleased to see the quick response from the White House. “We applaud the Obama administration for reinforcing its commitment to homegrown ethanol,” Buis said in a statement. “Keeping the tariff on Brazilian ethanol will ensure the development of a domestic renewable fuel industry, which creates green collar jobs, reduces our dependence on foreign oil, strengthens our national security, and improves the environment.”
4 Comments »
Randy Wegmann
Repealing the tariff is only common sense. Tariffs skew the natural order of things and distort the free market. The Smoot-Hawley Tariff justifiably gets much of the blame for continuing the Great Depression.
If Brazil can produce ethanol more efficiently and economically than us, then we should be using it. Not using a tariff to distort the market.
Hello Me, Meet the Real Me
Imported oil or imported ethanol, what’s the difference? We need to produce our own fuel.
Jetty
So, Mr. Wegmann you are opposed to tariffs. Do you understand the purpose of tariffs? They are put in place for three reasons.
1. To protect fledgling domestic industries from foreign competition.
2. To protect aging and inefficient domestic industries from foreign competition.
3. To protect domestic producers from dumping by foreign companies or governments.
In the case of ethanol, this is a new and developing industry. If you remove the tariff, you stop any further development of renewable energy research. Brazil has mandated high levels 25-30% of ethanol through the years and has established energy independence. Instead of removing the tariff why don’t we learn from the Brazillians how to achive this energy independence by increasing our allowable limit of ethanol and produce all flex fuel vehicles. Within the next 20 years we have the ability to produce 140 bilion gallons of ethanol in this country and not need to import oil to run our vehicles.
JW
Great Depression…not so much. That is an insult to those that lived through the Great Depression. There is a difference between a bread line and a line at Pannera Bread.
The dollars collected from the tariff on imported ethanol offsets the blending credit dollars provided the oil companies who sell the blended product that would contain the imported ethanol. In addition, there is ethanol being imported without tariff from the caribbean.
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