Trump's Dilemma: Appease U.S. Biodiesel or His Argentine Buddy

by Mario Parker and Jonathan Gilbert (Bloomberg) The Trump administration’s decision in April to slap tariffs on Argentine soybean products came as a blessing for Bob Morton. Free of competition from the soybean-product giant, Morton etched out a plan to increase capacity at his Rhode Island biodiesel plant by more than 40 percent and hired 10 more people.

Now, those expansion plans are in jeopardy after the administration shocked the local biodiesel industry by announcing a review of the tariffs after Argentina made tax changes. Morton and other U.S. producers are hoping President Donald Trump’s long-running friendship with his counterpart in Argentina, Mauricio Macri, won’t factor into the review.

“We’re still trying to figure out who might have been behind this,” said Kurt Kovarik, vice president of federal affairs at the National Biodiesel Board in Washington. “It seems to be out of left field for an administration that’s willing to go to the mat to get better trade deals” for farmers and other industries.

The decision to reconsider duties on Argentina’s imports could be seen as well-founded after the nation raised an export tax on biodiesel to bring it more in line with the levy on soy oil. Soy-based biodiesel is now taxed at just three percentage points less than soy oil. When the first preliminary duties came into force in September 2017 the difference was much higher, at about 27 percent.

Argentina’s biodiesel exports to the U.S. were worth more than $1 billion a year before the anti-dumping and anti-subsidy duties locked them out of the market. READ MORE