Trump Caught Between King Corn and Big Oil
Cronyism created the no-win pickle the president now finds himself in.
Cronyism coming from either Democrats or Republicans is still cronyism, and one of the biggest crony deals Republicans have long upheld is with King Corn via the ethanol mandate. Recall back in 2016, the only prominent Republican presidential candidate willing to stand up and call for an end to the ethanol mandate was Ted Cruz. At least his position was clear.
Now President Donald Trump finds himself stuck between the gas and oil industry on one side and the ethanol/corn lobby on the other. Trump has been trying to appease both sides, while at the same time fighting a trade war with China.
Earlier this year, in a move aimed at winning support with King Corn, Trump’s EPA extended the sale of E15 or 15% ethanol gas to year-round. This move drew the ire of both the oil industry and environmentalists. However, in a move seen by the ethanol lobby as a means to mitigate the impact of the E15 extension, the EPA increased the number of waivers it issued to smaller refineries, exempting them from the Renewable Fuel Standard mandate. That angered farmers as it reduces demand, but it’s a Faustian bargain to build your business on government support.
Now with China’s targeted tariffs really starting to hurt American farmers, it appears that Trump is looking into ways to increase biofuel demands by raising the level of ethanol in gasoline blends for 2020 and 2021. As Hot Air’s Jazz Shaw observes, “How long can this go on? No matter what Trump does to curry favor with one group, the other one will be up in arms. He wants to play nice with the folks in Iowa, but he also needs to maintain the support of states with a lot of refineries, including Pennsylvania He can’t keep both of them happy at the same time, so it seems obvious that he needs to pick a side and stick with it.” This is just one of the many problems created by cronyism.
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