Study: Elimination of Tariff Would Weaken Economy, Cost Jobs

WASHINGTON, DC – Growth Energy, the coalition of U.S. ethanol supporters, released a study today which showed that if the tariff on foreign ethanol is allowed to lapse at the end of the year, extreme job losses and the loss of billions of dollars in economic activity would follow – with 28 states being the hardest hit across the manufacturing, finance and real estate sectors, as well as agriculture.

The study found year-to-year job losses go from 39,506 in the first year after the tariff lapses, to 115,642 in the second year, and 161,384 in the third year. Job losses continue year-after-year and most of these jobs are never regained, according to the 10-year projection performed by the University of Missouri’s Community Policy Analysis Center.

The decline in economic activity following the lapse of the tariff was calculated at $9.2 billion the first year, $26.4 billion the second year, and $36.7 billion the third year – and remaining in the double digits during the 10-year projection, hitting $21.2 billion in 2021.

“We urge Congress to move rapidly to maintain the tariff. This would prevent foreign-subsidized ethanol from undercutting American ethanol companies and putting American workers out of a job. And ultimately it makes no sense to replace our addiction to foreign oil with an addiction to foreign ethanol,” said Tom Buis, CEO of Growth Energy. “The U.S. would pay a steep price to remove the tariff. This study shows it in stark detail. We’d see billions of dollars and hundreds of thousands of jobs drain out of the American economy.”

The Missouri study found that the six states that would see the largest declines in economic activity due to removal of the ethanol import tariff are (in order): Iowa, Illinois, Nebraska, Minnesota, Indiana and South Dakota. Manufacturing – already a hard-hit sector of the economy – would see the largest decline, followed by the service industry, financial services, and wholesale trade sectors. The Missouri study predicted steep drops in value for corn, wheat, barley and sorghum.

A separate study conducted by IHS Global Insight predicted that without the tariff, Brazilian ethanol imports would climb to as high as 2 billion gallons a year – but displace domestic ethanol, and virtually no oil. The Global Insight study also predicted a 24-month plunge in corn prices due to the decrease in domestic ethanol production.

“This independent analysis confirms what we’ve been saying all along. Since the domestic ethanol industry has an arbitrary regulatory cap on its access to the marketplace, removing the tariff doesn’t displace a single drop of foreign oil – but only serves to smother U.S. ethanol, which is the only large-scale domestic alternative we have to foreign oil.”


About Growth Energy

Growth Energy is a group committed to the promise of agriculture and growing America’s economy through cleaner, greener energy. Growth Energy members recognize America needs a new ethanol approach. Through smart policy reform and a proactive grassroots campaign, Growth Energy promotes reducing greenhouse gas emissions, expanding the use of ethanol in gasoline, decreasing our dependence on foreign oil, and creating American jobs at home. More information can be found at