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RFA President and CEO Geoff Cooper at USTR hearing

RFA President and CEO Geoff Cooper said a thorough investigation into China’s prejudicial trade actions with American agriculture is “justified and necessary” and that the ethanol industry has been substantially impacted as a result. Prior to the agreement, China was the top export market for U.S. dried distillers grains and one of the largest export markets for U.S. ethanol.

“China’s failure to fully implement the Phase One Agreement has resulted in lost market opportunities and significant financial losses for U.S. ethanol producers and the farmers who supply grain to our member companies,” said Cooper in his testimony.

“China reneged on its commitment to meaningfully increase purchases of ethanol and distillers grains in 2020 and 2021 and entirely failed to address the structural barriers that hindered our industry’s long-term access to the market,” Cooper said. “Instead, China erected new barriers that were even more punitive to U.S. ethanol and distillers grains, completely shutting American-made ethanol out of the market over the past four years.”

Cooper is confident the Section 301 investigation will provide indisputable evidence that China’s unfair policies have severely injured U.S. ethanol producers and farmers. “Thus, we support USTR and the Trump Administration taking action to ensure U.S. producers are protected against the deleterious effects of China’s failed trade policies.”
Read Cooper’s testimony here.

In comments to the U.S. Trade Representative this week, the Renewable Fuels Association noted that while the Trump administration has worked to enforce a 2019 trade agreement, China has failed to satisfy commitments to increase trade in ethanol and distillers grains. Accordingly, RFA calls on the United States to implement reciprocal duties on U.S. imports of Chinese ag products.

“On behalf of RFA’s membership, and the U.S. ethanol industry as a whole, we are extremely grateful to President Trump and his Administration for its steadfast commitment to fair and reciprocal trade with China,” wrote RFA President and CEO Geoff Cooper. “We applaud 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 U.S. ethanol producers and farmers and caused significant financial losses.”

Cooper noted that China purchased only 58 percent of the total U.S. goods and services exports in 2020 and 2021 that it had committed to buy under the Phase One Agreement signed in 2019. In fact, China ultimately failed to buy any of the additional $200 billion in goods in 2020-21, instead falling $11.6 billion short of even reaching the baseline level of purchases.

RFA pointed out that after the signing of the Phase One Agreement, China purchased only 31.7 million gallons of ethanol from the U.S. in 2020 valued at just under $51 million. The following year, China purchased just over 100 million gallons of ethanol from the U.S. valued at $162 million and since 2021, U.S. ethanol imports by China have essentially fallen to near zero and flatlined. A similar trade pattern occurred with respect to distillers grains.

“Today, as our nation’s farmers and rural communities face serious economic challenges, it is critical that our trading partners live up to their commitments and be held accountable for failing to comply with key terms and provisions negotiated in the process,” Cooper concluded. “Moreover, trading partners must act in good faith as we work to negotiate longer-lasting, more resilient trade agreements. It is critical that China work to restore its commitment to agriculture purchases under the Phase One Agreement or otherwise face reciprocal action for its failure and/or refusal to do so.”