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U.S. trade probe could reopen lost ethanol market in China

The CEO of the Renewable Fuels Association (RFA) says the organization appreciates the U.S. Trade Representative’s efforts to enforce an important 2019 trade agreement with China.

Geoff Cooper says the Section 301 investigation is well warranted after China failed to meet nearly half of its purchase commitments.  

“We did see a little volume move to China and a little bit of expansion in 2020 and 2021, and then they slammed the door in our face, and ethanol exports to China dropped to 0 in 2022.”  He says, “That’s where they’ve been ever since.”

China currently levies a 70% tariff on U.S. ethanol imports, which Cooper says makes accessing the market impossible.

“In 2016, they were our leading market for distillers grains exports. Half of all U.S. exports of distillers grains were going to China.”  He says, “Around that same time, about 20% of total ethanol exports were going to China. So, it was an important market. We saw it as a growing market, and the wheels came off.”

He tells Brownfield that RFA would like to see the investigation result in the removal of Chinese trade barriers or renewed purchase commitments.

“Even without a commitment for guaranteed purchases or guaranteed volumes, if they just remove that tariff, we believe the free market would certainly allow greater volumes, greater shipments of U.S. ethanol into that marketplace,” he says.

If China fails to address the situation, Cooper says RFA is calling on the United States to implement further reciprocal duties on U.S. imports of Chinese ag products.

“The ultimate goal is to get China to the table to talk about a path forward that works better for both of our countries,” he says.

The U.S. Trade Representative’s next hearing on the case is set for December 16^th.

AUDIO: Geoff Cooper – RFA