Retaining the Tariff is Good Economic Policy

By Mike Bryan | April 15, 2010
The elimination of the ethanol import tariff is wrong! For years the domestic ethanol industry has worked to build market share. More recently, the use of higher blend levels is close to becoming a reality. In addition, there are more E85 pumps across America than ever before and the numbers continue to grow.

This growth has been predicated on our desire to reduce our dependence on imported oil and bolster our rural economy. The elimination of the import tariff is absolutely contrary to what the industry and the nation have been striving to accomplish since ethanol first began 30-plus years ago. If an expanded market for ethanol is going to be filled by imports, what have we accomplished?

Some would argue that ethanol is a global commodity and should be free to roam about the world like oil. One only needs to look back at history and see what the unrestricted importation of oil has done to the American economy. Tens of thousands of domestic jobs lost and the billions of dollars leaving the country every year for imported oil. At a time when jobs and the economy are both in grave danger, such wrong-headed policy clearly is not in step with the direction America is moving.

This is not protectionist, it is simply good economic policy. With a few exceptions, oil is no longer a domestic product. Ethanol is still a domestic product, and it deserves to be protected under the current import tariff regulations. It's not just the jobs that are at stake, although estimates range as high as 100,000-plus jobs that would be lost if the import tariff is allowed to lapse, it's also the economic impact it would have on main street America.

American farmers, some who have invested their life savings in an ethanol plant, would be forced to compete with heavily subsidized ethanol from countries with labor costs a third or less of what they are here. Ethanol plants with plans for expansion would be forced to cancel those plans, causing a severe blow to the local economy. In addition, such a move could potentially have a devastating effect on the emerging cellulosic ethanol industry, if cheaper imported ethanol in the billions of gallons were allowed into this country. Funding for new ethanol projects of any kind would dry up overnight.

If one simply looks on the surface of this issue, it would be easy to conclude that we should open our doors for imported ethanol as we have for imported oil, but you do not have to peel back the onion very far to begin to see the flaws in such reasoning. American farmers built this industry, invested in this industry and promoted this industry, overcoming unbelievable odds. To simply wipe out the dreams and aspirations and decades of hard work by letting the ethanol import tariff lapse would fly in the face of the American dream.

That's the way I see it!