President Donald Trump drew a great deal of electoral support from farm country USA last November, but his continuing interest in erecting trade barriers is not good for the ag economy.

Earlier this week Bloomberg News reported that the administration is questioning the rising imports of Brazilian ethanol into the United States.

Brazil, which makes its ethanol from sugar, trails only the U.S. in ethanol production. It is also a major consumer of the biofuel. Both nations import the alcohol from each other, with demand fluctuating with the prices of corn and sugar.

As the Bloomberg report notes, American ethanol producers (and corn farmers by extension) have more to lose in a trade war with Brazil. This nation ships four times the ethanol to Brazil as it imports from the South American giant.

U.S. ethanol production exceeds domestic consumption; we do well to export the surplus. But trade barriers with China have already arisen, with higher tariffs placed on ethanol and an animal feed byproduct. With one major market already dented, the ethanol industry can hardly afford to see another damaged.

Trump’s trade instincts favor protectionism; that is no surprise and consistent with the tone of his campaign. But quotas and tariffs don’t open markets, and the highly productive American farmer will always do better with freer trade. Washington should avoid an ethanol trade war.

Why It Matters:

Brazil and the United States are moving toward a trade war over ethanol, and Midwestern corn producers figure to lose.

Mankato Free Press, Aug. 9