Insight Focus
RFA urges US to enforce China trade deal. US ethanol exports to China have dropped to near zero since 2021, causing financial losses for producers. The Farm Bureau calls for maintaining the trade ceasefire to protect agricultural exports amid ongoing talks.
RFA Calls for Action as China Misses Ethanol Targets
In Washington, the Renewable Fuels Association (RFA) has thanked the current US administration for its efforts to enforce the 2019 trade agreement with China, noting in comments to the US Trade Representative (USTR) that China has failed to meet its commitments to increase trade in ethanol and distillers grains.
Accordingly, the RFA has called on the US to implement reciprocal duties on US imports of Chinese agricultural products.
“On behalf of RFA’s membership, and the US ethanol industry as a whole, we are extremely grateful to the current administration for its steadfast commitment to fair and reciprocal trade with China,” wrote RFA President and CEO Geoff Cooper. “We applaud the USTR for taking a closer look at China’s failure to deliver on its Phase One commitments, which has resulted in a lost market opportunity for US ethanol producers and farmers and caused significant financial losses.”
Cooper noted that China purchased only 58% of the total US goods and services exports in 2020 and 2021 that it had committed to buy under the Phase One Agreement signed in 2019. In fact, he said, China ultimately failed to purchase any of the additional USD 200 billion in goods pledged for 2020–21, instead falling USD 11.6 billion short of even reaching the baseline level of purchases.
Source: PIIE
Specifically, with respect to ethanol, after the signing of the Phase One Agreement, China purchased just 31.7 million gallons of US ethanol in 2020, valued at just under USD 51 million. In 2021, China purchased just over 100 million gallons, valued at USD 162 million. Since 2021, US ethanol exports to China have essentially fallen to near zero and have flatlined. A similar pattern occurred with distillers’ grains.
Source: EIA
Farm Bureau Calls for Stability
In recent weeks, the US has lifted tariffs on many food and agricultural imports not produced domestically. Speaking about those reductions, US Trade Representative Jamieson Greer said the time was right to offer tariff relief after reaching a “critical mass” of trade deals.
The Farm Bureau said it wants the Trump administration to maintain the trade ceasefire reached with China in November. The group expressed concern that Beijing could again shut down purchases of US agricultural goods if the administration imposes new tariffs.
The Farm Bureau’s stance contrasts with that of several other organisations that favour cracking down on China. As of Monday afternoon, the USTR had posted comments from more than 50 groups and other interested parties, including some calling for a strong response to what they described as Beijing’s failure to meet its Phase One commitments.
Discussions between the US and China are ongoing.
