Lugar calls for end to tariff on Brazilian sugarcane ethanol
Sen. Dick Lugar (R-Ind.) stopped by ($ub. req’d) the American Enterprise Institute yesterday to give a speech arguing that Congress should lift the 54-cents-a-gallon tariff on imported ethanol.
“To demonstrate leadership the United States should lift its tariff on Brazilian ethanol that now shelters the U.S. industry,” Lugar told the AEI crowd. Many politicians — including Lugar, who’s from a big corn state — have supported the tariff to protect American biofuels from Brazil’s cheaper sugarcane ethanol. But now there’s a growing movement calling for elimination of the tariff to bring down fuel costs and lower demand for corn.
Sens. Dianne Feinstein (D-Calif.) and Judd Gregg (R-N.H.) introduced legislation in June to lower the tariff to 45 cents a gallon. Their bill would prohibit the tariff on imported ethanol from being higher than the subsidy to produce ethanol domestically. A few weeks ago, GOP presidential candidate John McCain also advocated dropping the tariff.
Brazilian ethanol company UNICA is hoping to seize on what seems to be shifting opinion in Congress. They’re running radio and TV ads in California, Florida, and Washington, D.C., over the holiday weekend, aiming to spur consumer outrage over the tariff.