Trade disputes with China disrupt US ethanol export growth
The US-China trade war continues to hinder the US ethanol industry, which has been hit hard by Chinese tariffs. During New York Sugar Week, Mike Dwyer, Chief Economist at the US Grains Council, outlined the challenges facing the industry.
“Without the tariff protection, we would probably supply 90-plus percent of all ethanol import needs they had,” Dwyer explained. This comes as China initially planned to adopt “E10” fuel, containing 10% ethanol, by 2020. The trade conflict has significantly dampened this potential market.
Dwyer noted, “The reality is that the tariff war has hurt us badly. It was horrible timing.” If trade relations improved, industry margins could grow by approximately 10 cents per gallon, boosting profitability for ethanol producers.
Although domestic initiatives like E15 gasoline expansion are underway, experts argue that exports hold the key to the industry’s future. “Exports are the future of our industry – even more so than E15,” Dwyer emphasized.
Resolving the trade dispute with China is crucial for the US ethanol industry to regain its global competitiveness and expand its market share. Industry stakeholders remain hopeful for a resolution to restore growth and stability.