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ACE: China phase one trade deal is a step forward, but significant ethanol market constraints remain

Sioux Falls, SD (January 15, 2020) – Today, a “phase one” trade agreement between the U.S. and China was signed and is set to go into effect within 30 days. Among other provisions, the partial agreement includes a commitment by China to purchase agricultural products over the next two years, including U.S. ethanol and distillers grains. American Coalition for Ethanol (ACE) CEO Brian Jennings issued the following statement after early assessment of the available trade agreement details:

“Phase one represents a positive step in the right direction, especially once we have evidence that China has made actual purchases of U.S. ethanol and distillers grains, but given ongoing export and domestic market constraints, there is much more work to do.

“The signing of this partial trade deal with China doesn’t erase the pain still being felt at home due to the artificial lid EPA’s mismanagement of the Renewable Fuel Standard has placed on domestic ethanol demand. Further, today’s trade agreement follows reports that China suspended its plan to implement an E10 nationwide mandate this year, raising more uncertainty for the industry. We remain hopeful the next phase of talks with China can conclude with the restoration of a robust and enforceable trade relationship.”

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