First hint: 54-cent-a-gallon ethanol tariff may shrink under 2009 budget
The Bush Administration will release its 2009 budget to Congress Monday and one of the expected changes will be to the ethanol tariff, currently set at 54 cents for each imported gallon. The groundwork for this change was set by Energy Secretary Sam Bodman. According to Domestic Fuel, Bodman said, "I would just say I think that there are advantages to having had the kind of both subsidies and tariffs that have helped protect this industry. I believe that, the best I can tell, this industry is pretty close to being able to stand on its own."Not everyone is in favor of that kind of change. Senator Chuck Grassley (R-IA) said that:
By lifting the ethanol tariff, we'd end up subsidizing Brazilian ethanol. I can't figure out why Secretary Bodman would want the United States to risk becoming dependent on Brazilian ethanol when we're already dependent on Middle East oil. His comments really do a disservice to President Bush who has been the most pro-ethanol president we've ever had. In addition, the United States already provides duty-free treatment for Brazilian ethanol that is merely dehydrated in the Caribbean Basin Initiative countries. Brazil has yet to make full use of this program. I don't see why we should bend over backwards to provide yet more duty-free treatment for Brazil's ethanol producers.
We'll know more tomorrow, but this could be decent-sized news.
[Source: Domestic Fuel, Senator Chuck Grassley]
Reader Comments (Page 1 of 1)
Golden Boy 4:30PM (2/03/2008)
Spoken like a true farm state politician. His comments about the Mid East vs. Brazil were quite jawdropping. Apparently, Chuckster doesn't see a difference between the Brazilians and the Wahhabists.
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rgseidl 6:32PM (2/03/2008)
In which universe does eliminating a protectionist tariff amount to actively subsidizing the competition? Sen. Grassley needs to take Free Trade 101 again.
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gilberto Jamardo 9:12AM (2/04/2008)
If every American ethanol producer could import without taxes ethanol from outside, they could get better profits and will be encouraged to produce more. This would be a win win solution. Besides the USA enemies are the great oil producers, their huge profits will come back as terrorists attacks, I am not even talking about that the oil is destroying the environment, and the ethanol produced by a friend country like Brazil is being with taxes like we were USA enemies and we were destroying the world
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gilberto jamardo 8:16AM (2/04/2008)
If every American ethanol producer could import without taxes ethanol from outside, they could get better profits and will be encouraged to produce more. This would be a win win solution. Besides the USA enemies are the great oil producers, their huge profits will come back as terrorists attacks, I am not even talking about that the oil is destroying the environment, and the ethanol produced by a friend country like Brazil is being with taxes like we were USA enemies and we were destroying the world
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Dan 11:29AM (2/04/2008)
And what's the import tariff on petroleum? Zero?
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rgseidl 4:36PM (2/04/2008)
@ Dan -
yes, I believe so. Crude oil is a fungible commodity, i.e. if the US decided to slap a tariff on oil from specific countries, it would simply be sold to other buyers. The US would pay a little more for its oil and achieve virtually nothing, given how interconnected and interdependent the major national economies are these days.
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mike 10:41PM (2/04/2008)
Oil is fungible until it Isn't.
If the auto fleet were impelled to produce electric cars, then oil doesn't matter. We've got to get to that point.
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