NEVADA, Iowa -- On Tuesday, China officially issued more tariffs on U.S. products including ethanol. The new ethanol tariff adds an extra 15% on top of the 30% tariff already in place, and is not welcome news for Iowa farmers.
Corn farmer Mark Kenney says it's at times like these when he feels like a cog in the machine.
“Anytime that agriculture is used as leverage in a global, I guess, trade war, if we want to use that term, it's concerning,” said Kenney.
The Chinese issued new tariffs in response to the Trump administration’s tariffs on aluminum and steel. Kenney says now anyone involved in Iowa’s farm economy has been caught in the middle.
“This is a retaliatory move by the Chinese based upon other tariffs on other products that I have nothing to do with, and for the most part, people throughout the state of Iowa who depend on the economic engine, that agriculture, has nothing to do with their industry either,” said Kenney.
On the campaign trail in Iowa, then-candidate Trump promised farmers he would fight for the agriculture industry. Kenney says farmers haven't forgotten.
“I'm looking towards our policymakers on a national scale, come on guys, we can’t have this! Policymakers in Washington, especially in the White House, need to recognize that a lot of people out here in the farm world helped get you to where you're at, and we're paying very close attention to this situation,” he said.
The tariff comes as a double whammy for corn growers. EPA Director Scott Pruitt is exempting some refiners from having to accept ethanol into the marketplace. Iowa Renewable Fuels Association Director Monte Shaw says that's at odds with the White House’s promise to keep the renewable fuel standard in place.
“So instead of saying, 'hey, you're going to have a 15 billion-gallon market in the United States, we're going to exempt this and this and this and this,' and all of a sudden it's below what we blended last year,” said Shaw.
That means less demand when Shaw says corn farmers are sitting on piles of unused corn.
“My hope is that once this posturing calms down, clearer heads prevail and we discover, hey, everyone in the world benefits from trade,” said Kenney.
The Reynolds administration issued the following statement:
"Nobody wins in a trade war. While Governor Reynolds agrees there are concerns with China, especially in regards to intellectual property and tech transfer, she would encourage the president to resolve the problem without elevating it further. Farm states like Iowa feel the impact of unintended consequences in a trade war, as evidenced by the recent tariffs placed on ethanol and pork."
Kenney says they can only wait and see how big an impact the tariffs will have or how long they'll be in place. He says it's hard to guess whether China has the corn production to handle its ethanol needs domestically, but any time a major player is taken off the board it's not a good thing for farmers.