White House Hubbard: No Need To Scrap Ethanol Import Duty January 30, 2007Posted by notapundit in Economic News, US News, White House.
WASHINGTON (Dow Jones)–One of the White House’s top economic advisers said Tuesday that the Bush administration sees “no reason” to scrap a tariff on ethanol imports before its scheduled expiration.
“There’s a reason behind the import duty, and the president’s position is, that’s in law right now, and we see no reason to change that,” Allan Hubbard, director of the National Economic Council, told reporters traveling with President George W. Bush.
Bush will discuss his energy strategy later Tuesday during a visit to the headquarters of Caterpillar Inc. (CAT) in Peoria, Ill.
Hubbard, briefing reporters aboard Air Force One, was asked if the tariff on imported ethanol conflicts with the president’s drive for energy independence and free trade.
“Well, as you know, ethanol receives a – my numbers may not be perfect here – $0.51 per gallon subsidy, and I think there’s a $0.54 per gallon import duty, and those offset one another,” Hubbard said.
The import duty is “set to expire in 2009, and at that point in time we think it’s appropriate for Congress to revisit that,” he added.
In his State of the Union address, Bush outlined plans to sharply cut U.S. consumption of gasoline, a strategy that relies on the use of 35 billion gallons of alternative fuels like ethanol by 2017, a big increase from the current target. Heavy demand for ethanol has boosted prices and raised questions about the import duty.
Last week, Energy Secretary Samuel Bodman told Dow Jones Newswires that he expects neither the ethanol subsidy to remain in place beyond 2010, nor the import duty to remain beyond 2008.
“The idea is that at some point in the future all these technologies need to stand the test of the free market,” Bodman said.
By Henry J. Pulizzi, Dow Jones Newswires