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By Robert Rapier on Mar 23, 2009 with no responses

Tariff Turnabout

This is a timely story, coming on the heels of the previous story on the tariffs the U.S. applies to Brazilian ethanol:

European tariffs stun U.S. biodiesel industry

The U.S. biodiesel industry will suffer from new trade barriers that threaten to end its lucrative export business to Europe, and in Texas the measure could be devastating.

Last week, the European Commission said U.S. biodiesel exporters will now have to pay additional anti-dumping tariffs of up to 29 percent, and anti-subsidy duties of up to 41 percent. The tariffs are temporary for the next six months, but the commission will decide by this summer whether to extend them for five years.

The tariffs came after complaints last year that U.S. biodiesel producers were collecting both U.S. and European subsidies and then selling huge quantities of fuel in Europe at prices that undercut domestic producers.

European officials estimated that 80 percent of U.S. biodiesel production was exported in 2008.

I would suspect that people who might have a problem with their tax dollars subsidizing Brazilian ethanol would also have a problem with their tax dollars subsidizing European biodiesel users. If I am not mistaken, ethanol that is exported loses most of the U.S. tax advantages, hence the incentive is to use it at home. Apparently the biodiesel industry is set up differently with respect to the tax credits.

Credit to KingofKaty for the find.