Both constituencies are important to Trump’s 2020 re-election bid and both say they have been damaged by his administration’s policies, but Midwest farmers in particular have been giving Trump political headaches and — separately from the biofuels fight — have sustained economic damage from the year-long trade war with China.

Sound confusing? Well, it is, partly because the President did not offer any details beyond dangling the terms “Ethanol” and “small refineries” in a Tweet.

Trump posted a message on Twitter Thursday that said he is about to deliver a big prize, which he describes as a “giant package” to “the Farmers.” His choice of words suggested that he intends to address the RFS fight — no simple task.

He wrote:

The Farmers are going to be so happy when they see what we are doing for Ethanol, not even including the E-15, year around, which is already done. It will be a giant package, get ready! At the same time I was able to save the small refineries from certain closing. Great for all!

Might sound good to some, perhaps, but it leaves questions.

Whatever the bargain turns out to be, Trump’s moves are limited and may rely on a part of the renewable energy policy that he never discusses and that is not mentioned in the Tweet: biomass-based diesel and renewable diesel.

That is because one of the implements in EPA’s toolbox, should Trump direct the agency to improve the Midwest farm belt’s lot, would be to boost the amount of mandated biofuel blending for 2020 and 2021. “Biofuel” means more than just ethanol; it includes several forms of biodiesel, and allowing growth in that sector could very well be a necessary part of any settlement to the RFS fight. And the biodiesel industry argues it has plenty of capacity for market growth that is not being tapped. 

Because ethanol often gets the lion’s share of attention in hearings and in the news media, the corn derivative seems to have become the shorthand for biofuel, much like “Coke” stands in for the entire range of carbonated beverages for people of many cultures, a kind of universal term for “soft drink.” It is unclear whether biodiesel was part of any White House discussions underlying Trump’s informal announcement about an “Ethanol” deal. 

“We feel many times we are one of the forgotten pieces of the RFS,” National Biodiesel Board (NBB) CEO Donnell Rehagen said Thursday. 

Rehagen said in during a call with reporters Thursday that flat growth in the biodiesel volumes under the RFS and the recent small refinery exemptions (31 given in August by EPA to refiners, adding an estimated $1.43 billion in compliance credits — RINs — back into open trading) “represents a rollback for our market” at a time when the biodiesel industry believes government should be allowing for growth. The Iowa Soybean Association said Aug. 21 that market prices for soybeans, a biodiesel feedstock, are at multi-year lows.

The biodiesel industry has argued repeatedly, and has even sued in federal court over the issue, that it can handle growth and EPA is not giving it the market share under the RFS that the industry has proved it can absorb. On Thursday’s press call, responding to a reporter’s question about growth capacity, NBB’s Vice President of Federal Affairs Kurt Kovarik said, “Biodiesel is uniquely situated in that we’ve always produced above the volume that EPA has set; we do not have infrastructure constraints and we have no feedstock botttlenecks, so capacity to produce well beyond what the government sets” have been consistently demonstrated over the past several years. 

In an Aug. 23 letter to Trump, a group of soybean producer associations from 10 Midwestern states wrote, “Your EPA recently proposed a rule for the 2020 RFS standards that sends a chilling signal that the market for biodiesel and renewable diesel will be capped. And then the agency topped that off by further rolling back those volumes through additional small refinery exemptions. More than that, EPA has proposed to ignore a Court order to restore gallons to the RFS program that it unlawfully reduced in 2016.”

Underlying all of the controversy over volumes, however, is a surfeit of small refinery exemptions under the RFS, and no discussion of the mandated volumes is complete without taking into account these waivers because, farmers and biofuel producers argue, they cancel out much, if not all, of the increased blending volumes that Congress intended to help develop biofuel markets. 

For the 2018 compliance year, EPA handed out an estimated 1.43 billion gallons worth of blending waivers, and in so doing, returned $1.43 billion in RINs to refiners and other obligated parties who bought the RINs during 2018 to comply with the minimums pending the outcome of their petitions for exemptions, through 31 small refinery exemptions.

If EPA continues to hand out small refinery exemptions at the same rate as the past two years, it will reduce biodiesel demand by 2.54 billion gallons and cause a $7.7 billion loss for the industry, according to University of Illinois economist Scott Irwin.

Soybean farmers are not the only group pointing out that the federal government is ignoring potential growth in the use of biodiesel. A bipartisan group of 39 U.S. senators, many of them (but not all) from the Midwest,  wrote that they thought EPA did not raise the mandated 2020 volume for biomass-based diesel enough after the agency released a proposal for modest increases last summer.

“While these proposed increases are encouraging, these volumes continue to underestimate the existing potential of the biodiesel and renewable diesel industries in our states,” the senators wrote. “We believe the biodiesel industry can do more and that EPA should demonstrate more confidence in the RFS program’s ability to drive growth. Increasing biomass-based diesel and advanced biofuel volumes would encourage investment in capacity and new fuel development.” EPA did not heed their advice.

Republican Sens. Chuck Grassley and Joni Ernst of Iowa, were among the signers.

All-important Iowa — electorally speaking — sits at the heart of the debate. Not only is it a big biofuel producer and agricultural jugarnaut, it has in Grassley and Ernst two renewable energy champions in the Senate. The renewable fuels industry there accounts for nearly $5 billion of Iowa’s gross domestic product, generates more than $2.4 billion of income for Iowa households and supports almost 47,000 jobs throughout the entire Iowa economy, Gov. Kim Reynolds told EPA last year in a hearing.

Iowa’s interests encompass both the ethanol and biodiesel components of the RFS. 

NBB’s Rehagen concluded, “My original point — it seems that there’s always an emphasis or connection to ethanol in the RFS. Biodiesel and renewable diesel are never thought of as much, even though we have a huge impact. We hope the President understands that biodiesel must be considered in that list, and moreover, restoring the demand under the RFS is the only thing that can help the biodiesel industry.” 

As of publication of this article, there was is no word on when or how the White House may roll out the announcement of an RFS deal. 

— Dan Macy

Morgan Stanley reports that the project aims to invest up to $1.2 trillion in roads, railways, power grids and ports along the centuries-old Silk Road in the next decade. But 62% of the countries along the road have sovereign debt rated as below investment grade or not rated at all. It also passes through several conflict zones and countries recognized as among the most corrupt in the world.

But the project may have some non-monetary benefits.

Michael Every, head of financial markets research at Rabobank Group in Hong Kong, tells Bloomberg that it’s perhaps best to think of Belt and Road as a “vast geopolitical project aimed at cementing China’s political and trade role over that of the U.S., not an economic one in the sense that each project will generate a return.”

Data gathered by Bloomberg suggests China has so far committed more than $500 billion for the road. The money comes from multiple sources including institutions like the Silk Road Fund, which has invested $40 billion. In the first nine months of 2017, domestic companies have invested $9.6 billion in 57 countries along the route. The National Pension Fund will also deliver a chunk to this project.

But Michael Taylor, Moody’s chief credit officer for APAC tells Bloomberg this initiative could reap great returns if done right. “These countries have high growth and growth potential, and often what is holding them back from achieving that potential is a lack of infrastructure.” Cao Yuanzheng, chairman of BOCI Research Limited in Beijing adds, “Even in the poorest countries, projects like public water system, electricity grid and railway are all commercially viable as long as there is income generated from user fees.”

The company will cease production of its Ford Focus vehicle in Michigan and shift that project to China by 2019. Last January, Ford was eyeing a new $1.6 billion plant in Mexico to continue building Ford Focus units. But staying true to his promise to protect American jobs from foreign manufactures, Trump slammed Ford and persuaded it to pull out of the deal. Instead, it thought to use an existing plant in Hermosillo, Mexico, while using the $500 million it saved to invest in a Michigan plant that produces electric cars.

But now, the company has scrapped that plan as well and decided to make China the sole birthplace of the Ford Focus.

Ford Executive Joe Hinrichs said the move to China would allow it to make savings, which would be invested toward the growing parts of the company. The firm said the decision will not affect the American workforce, and the Michigan plant making Ford Focus cars will switch to making trucks with the same amount of hourly workers by 2018.

Still, the move may anger Trump who continues to champion the call to have as many American goods bought in America made in America. Tax reform, which is likely higher on his agenda, will likely play a role here as well.

In response to Ford’s latest move, White House spokesman Sean Spicer said the shift will hurt U.S. car suppliers. He also underscored the urgent need for tax reform that could help make domestic manufacturing more competitive

Bill Russo, the former chief executive of Chrysler China, told the New York Times that “This acts as a powerful motivation, especially for mass-market brands, to localize their products in China.”

But back in the U.S., advisers to President Trump say America’s deficit in the auto trade may push Chinese relations further south ahead of the meeting between Trump and his Chinese counterpart President Xi Jinping.

Less than 5% of cars in China are imported, but the figure stands at 25% for the U.S. Throughout his campaign trail, Trump has called for fairer business practice on China’s end and to play on an even playing field when it comes to trade. But with major manufactures moving their manufacturing plants to China, they have aided to the country’s growth as the world’s leading auto maker.

It will undoubtedly be a tough task for the president to “bring jobs back” as he promised.

Former Treasury Secretary Lawrence H. Summers discussed the issue with Li Keqiang, China’s premier, at a closed-door meeting on Monday. Speaking on condition of anonymity to the Times, people with knowledge of the meeting said China’s stance was something along the lines of “every country has trade issues.”

But the economic implications span far beyond differences in tax structure. American auto makers have found a large source of cashflow from China, and many simply changed the channel when Trump referenced China.

The same data shows that in China, earners at the bottom make more collectively than those in the top with the lower half making 15% of total income and the top making about 13%. The report stated that although the Chinese government still has time to reverse the income inequality gap, its very existence could lead to the end of the Communist Party. Today, it continues to be a major source of societal strife and conflict. The report, however, points to economic reform during the 80s which saw the country open its doors to foreign investment and trade as the main driver of income inequality. It cited these as having similar boons for the richest in the U.S., but noted the bottom half saw “absolutely no growth” during the same time period.

Recently, the Chinese government has increased rural resident’s incomes and limited tax burdens on low-to-middle income workers, while placing caps on the salaries of government enterprise officials.

Authors of the report recommended improving education, increasing access to skills for the bottom 50 percent, and boosting minimum wages among other suggestions.

Some analysts say the tax could push some of the biggest polluters out of business, and an earlier study by the Environment Ministry found it could reap in 50 billion Yuan per year or three times as much as similar legislation pulled in last year.

“This sends a clear message to the industry: you change, or you die,” said Shi Lei, deputy director of the State Environmental Protection Key Laboratory of Eco-Industry at Tsinghua.

The new law would force polluters to pay up to 12 yuan (HK$13.40) for each 0.95kg of nitrogen oxide or Sulphur dioxide released. Mines would have to pay 15 yuan for each tonne of tailings. Every tonne of ash produced by a coal-fired power plants will result in a fine of about 25 yuan. Nuclear power plants will also have to pay for producing radioactive waste.

Carbon dioxide, perceived by some experts as the most dangerous pollutant, is not on the list of regulated contaminants. Nonetheless, the government has made strides in pushing for stronger environmental regulations than ever before. On the other side of the world, some critics say a lax regulatory environment of industry has given China an unfair advantage in the world economy – a view shared by Peter Navarro, United States President-elect Donald Trump’s pick for head of his newly-created White House National Trade Council.

Moreover, the new law comes in a regulatory climate where local governments on the mainland are pushing further to expand the scope of “environmental crimes,” and prosecute people behind business with the worst environmental track records.

Yan Maokun, head of a research office at the Supreme People’s Court, says this law would make that easier.

However, some analysts say this regulation is still not enough.

Yuan Ying, assistant manager at Greenpeace East Asia’s office in Beijing, says the new tax would add 0.004 yuan per kWh to the cost of coal-fired power; however, he says the real environmental cost is estimated at between 0.1 yuan and 0.3 yuan per kWh.

This week, the mayor of the northeastern Taiwanese city of Taoyuan confirmed that Trump was considering erecting a series of luxury hotels and resorts there. Back in September, a Trump Organization representative visited the city’s Aerotropolis, a large-scale urban development project aiming to benefit from Taoyuan’s status as an East Asian transport hub — a visit that the mayor described as mere investment speculation, according to Taiwan News.

Other reports claim that Trump’s second son Eric Trump will visit the area later this year to discuss the potential business opportunity. Eric is also  executive vice president of the Trump Organization.

Trump has promised to hand over control of the Trump Organization to Eric and the rest of his children, Ivanka and Donald Jr., after he assumes office. But could Trump’s expanding business ventures put him in potential conflicts of interest, while he carries out his duties as leader of the free world?

In the last 50 years, it has been the norm for office-holders to hand over their assets to be managed by an independent trustee under a financial agreement called a “blind trust.” This agreement essentially means that the president has no knowledge of the trustee’s investments, thus allowing the president to make decisions with greater impartiality.

In Trump’s case, however, the agreement won’t be “blind” at all. Of course, the multibillionaire businessman and celebrity-turned politician is no stranger to breaking away from the norm.

Much like his presidency, the fate of his business empire is shrouded in mystery. And outside the Taiwanese business world, the city’s citizens are also waiting to see what will become of cross-strait relations under Trump, who stuck to an isolationist platform during his campaign and promised to bring back jobs to America — a pledge that resonated with Americans across the country.  

Dating back to even before Winston Churchill fashioned the phrase “special relationship” to describe the UK and the US, the two powerful nations were known for their amiable and politically-sound bond. For decades, if not longer, their ally-ship has encouraged strategic and mutually-beneficial collaboration. For Washington, the UK has had the significant act of being the door into the realm of European politics. But things are quickly changing.

“London has lost relevance to US foreign policy,” Charles Lichfield, a Europe specialist with the research firm Eurasia Group, said on a conference call with the media.

“Washington will not be pleased” with the UK leaving the European Union, he went on. “Part of London’s attraction for the US was its role as a liberal voice within the EU.”

In the wake of the Brexit referendum and the subsequent fact that foreign relations between the two have fallen into the territory of the unknown, however, a new competitor vying for Britain’s favor is on the rise: China.

China’s financial presence in the United Kingdom was already growing even before Britain’s decision to leave the EU. Several Chinese banks, including the Bank of China and China’s Construction Bank, have set up shop, with London serving as China’s European economic home-front.

Jennifer Harris, a Senior Fellow at the Council on Foreign Relations and formerly with the State Department and the National Intelligence Council, commented on this budding relationship: “The British are most inclined to be optimistic on where China is headed, given their economic and financial incentives are stronger than other EU countries,” she said.

While China has demonstrated its favor toward Britain with its investments and buying up property in London, the UK too has shown support of the Asian power-nation. An example: When the Chinese-led Asia Infrastructure Investment Bank was launched in 2015, the UK was the first major Western economy to apply for membership – a huge international statement, to be sure.

The UK’s bold move aroused concern from Washington, who feared that this new Chinese-led bank would interfere with the World Bank’s work and influence in international affairs.

“The UK’s decision to join the AIIB as a founding member upset Washington but pleased China enormously,” said Philippe Le Corre, visiting fellow at the Brookings Institution’s Center on the United States and Europe and author of the book “China’s Offensive on Europe,” CNBC reports.

Although Chinese officials have delivered statements expressing concern that the aftermath of the Brexit vote could create economic instability, outside strategists and experts say China may find that it is an advantageous time to up its game in investing in British assets.

Mr. Lichfield told CNBC in a phone interview: “China is very interested in investing in prestigious projects in Britain — specifically in energy and infrastructure.” This could help China increase both its economic and political platform, which is one of its goals, he added.

Mr. Lichfield believes that Beijing’s aim to build its financial standing will likely be encouraged by the UK, for incoming investments from other foreign nations, including many European countries, is expected to slow down.

“The UK Treasury’s balance sheet will be stressed in the next few years, therefore Chinese investments will be welcomed,” he said.

“China is willing to increase its presence in Europe, so this is a good opportunity,” Mr. Le Corre remarked. “Chinese could step in and buy properties and companies that are getting cheaper due to the pound.”

And it has already done so. This year alone, China has acquired or taken a stake in 17 UK corporations, totaling $2.3 billion, according to financial data firm Lipper.

Paul Holland, a former European software entrepreneur who is now general partner at venture capital firm Foundation Capital, weighed in on the matter: “Given the history and so forth over time, the Chinese will not hesitate to take advantage of the fact that the UK will be less affiliated with their EU partners going forward.”

In this time of financial uncertainty and shaky international partnerships in the aftermath of Brexit, only time will tell the future of its economic relations in the global arena – and China is one growing nation to keep an eye on.

In our world of consumerism and capitalism, we are happy that we can buy a T-shirt for ten bucks. But at what cost? How do we know the conditions in which our beloved items were made?

The United States has upped it’s game in trying to figure this out – specifically in regards to items which are products of forced labor camps. The pressure on China began when back in March, the U.S. closed a decades-old loophole in trade law. The 1930 law allowed goods “made with convict labor, forced labor or indentured labor” to be imported if they were in short supply.

In an effort to combat forced labor in prisons overseas, U.S. customs authorities now block imports suspected of being made this way. Recently, authorities blocked products specifically linked to three Chinese companies, which produce chemicals, textile fibers, and sweeteners.

Prison labor “has long been an ugly and opaque corner of China’s giant manufacturing and trade sector,” CNN reports. However, the U.S.’s push to fight this issue has been difficult, due to the immense lack of transparency and cooperation from the Chinese government.

Experts say that closing the loophole in trading practice places pressure on companies to pay more attention to the source of the products they are buying.

Nadira Lamrad, a researcher at the City University of Hong Kong, told CNN, “It’s a major driver for change. The U.S. is a huge market, so it can force corporations and manufacturers to think about the risks that exist within their supply chain.”

When reporters from CNN reached out to two of the Chinese companies whose products were blocked (and subsequently detained) – Tangshan SunFar Silicon Company and Tangshan Sanyou Group – they were met with no response. Multiple calls to numbers listed on the companies’ websites went unanswered, and some went as far as to disconnect their lines altogether. Clearly these corporations would rather pretend they don’t exist than speak any truth on the matter. Their tactic was cowardly – to become ghosts.

The third company linked to convict labor, Inner Mongolia Hengzheng Group Baoanzhao Agricultural and Trade, however, did have the guts to talk.  A manager who answered the phone said it was “absolutely impossible” that his company would have used forced prison labor, choosing this time the spineless strategy of denial. He declined to be identified by name.

Another corporation has rejected the claim that its goods were made by Hengzheng Group. Malaysia-based PureCircle, the company in question, imports the sweetener which was detained by U.S. customs. They pointedly noted that they have “an explicit policy prohibiting use of forced labor.” They say they are currently working with the U.S. to get the imported sweetener released.

The Chinese prison system has long been criticized internationally for its questionable ethics and human rights abuses. The former “re-education through labor” camps, which the Chinese government closed in 2014, have been condemned by human rights organizations for being used as a means to silence anyone deemed a threat, including political dissidents and activists.  

The “official” closing of the camps have done little to convince human rights advocates nor U.S. government agents that these horrid practices no longer take place in China. They say they believe “people are still forced to work under brutal conditions while locked-up in government-administered detention facilities.”

One such advocate, Hong Kong-based independent human rights researcher Joshua Rozenzweig, says, “[It’s] the use of state power to compel people to work … [and] deprive them of their liberty.”

The U.S. government continues to investigate the issue.

“I haven’t seen definitive proof one way or another that would convince me that this type of activity is not going on,” Kenneth Kennedy, a senior policy adviser with U.S. Immigration and Customs Enforcement (ICE), told CNN.

It is an agnostic approach, for sure. There is no evidence one way or the other, but just because there isn’t proof it is happening, does not mean it isn’t.

In fact, finding witnesses to corroborate these allegations against China is difficult. Inmates could still be locked up, and those who have been released often want to “lay low”, said Kennedy.

But “the reports are still coming in, and they’re credible. Just because the [Chinese] government says ‘We’re not doing this’ is not enough to not have us move forward,” he added.

Nearly a quarter-century ago, China signed a memorandum of understanding with the Unites States to prohibit the import of Chinese prison-made goods. The 1992 agreement also specified that any suspected violations to this would be “promptly investigated”.

Two years later, the agreement was expanded to include the requirement that both sides allow the other to visit suspected forced-labor camp sites within 60 days of a request being made. The agreement was atypical for the U.S., as this country does not have arrangements of this nature with any other nation. The memorandum, however, does not have any penalties attached for non-compliance by either party.

According to Kennedy, China has never made any such requests of the U.S. However the Chinese government took almost a decade to respond to U.S. requests for information.

China seems to have the mentality (or rather the deliberate ploy) of “mum’s the word”. It classifies most of its information about the prison system as “state secrets”, therefore the precise number of camps, prisoners, and other aspects of the system remain unknown.

The International Centre for Prison Studies in London puts the figure at about 700 prisons with at least 2.3 million people incarcerated. Washington-based nonprofit group the Laogai Research Foundation estimates there are as many as 1,400 forced-labor facilities of all types, holding 3 million people.

While these estimates vary, they all indicate that the prison-system in China is astronomical.

Neither China’s Ministry of Justice nor the Ministry of Foreign Affairs responded to questions faxed by CNN.

The complex global-nature of the modern-age trading system makes it all the more difficult for U.S. authorities to identify whether an item was made by forced labor, Kennedy expressed.

He offers the simple example of sneakers: each part of the shoe – the laces, soles, leather, and so on – could be made in different countries and in multiple factories.

And it isn’t just China that practices forced-labor. Many other countries use convict labor to make goods as well. The programs operate under the facade that they are preparing inmates for employment after their release from jail. How thoughtful of them. Our country is not so innocent either. Included in this inventory of nations is the good old U.S. of A, where prisoners work through government contractors to produce goods used for the government as well as the private sector.

Jeremy Prepscius, vice president for Asia Pacific at the non-profit Business for Social Responsibility, spoke about this practice: “There’s also a lot of unauthorized subcontracting — you give the order to a factory, but they give it to somebody else to complete,” he told CNN reporters.

Many activists are skeptical of the programs’ claims that they help inmates prepare for the outside world’s job-scene. These critics say conditions can be exploitative and detainees poorly paid. According to the Federal Bureau of Prisons, the government-run contractor for the federal system, Unicor, typically pays inmates a shameful and measly wage of between 23 cents to $1.15 an hour.

One key difference between the two nations is that unlike China, the U.S. doesn’t deny using prison-labor. Detainees in the U.S. are given the right to a fair trial in a much more transparent judicial system. The same is certainly not true of China, where confessions are often coerced and the legal system murky.

China officially bans the export of products made through forced prison labor.  But with the hazy nature and often distorted truth that the country offers the world, it is hard to know if that law is being enforced.

“You can audit a factory,” Rozenzweig said. “It’s a lot more difficult to audit a prison in China.”

The fivefold tax increase applies specifically to Chinese-made cold-rolled flat steel, the material used in car manufacturing, shipping containers, and construction.

Resentment over China’s trade methods are not confined to U.S. political leaders, rather the rancor is felt internationally as well; U.S. and European steel traders claim, for instance, that China is distorting the global market and undercutting them by “dumping its excess supply abroad.”

The U.S. Commerce Department also established anti-dumping duties of 71% on Japanese-made cold-rolled steel.

Asia business correspondent for BBC News Karishma Vaswani discusses the politics behind the Commerce Department’s ruling. “The ruling itself is only directed at what is a small amount of steel from China and Japan and won’t have much of an impact – but it is the politics of the ruling that’s worth noting,” she explains.

Ms. Vaswani continues, “U.S. steel makers say that the Chinese government unfairly subsidizes its steel exports. Meanwhile China has been under pressure to save its steel sector, which is suffering from over-capacity issues because of slowing demand at home.”

China’s Ministry of Finance has not directly responded to the U.S.’s ruling though its website announced this morning that China will maintain its current tax rebate policy for steel exports “as part of its efforts to help the bloated steel sector recover.”

A separate filing was made to the International Trade Commission by major American steelmakers imploring them to completely ban all Chinese steel imports.

The U.S. steel industry contends that approximately 12,000 workers have been laid off this past year alone due to China’s skewed competition. However, China claims that a weak economy is to be blamed for the industry’s problems and not their own practices. Furthermore, China asserts that it has taken steps to reduce its steel production.

Last year, China’s exports of cold-rolled steel flat materials to the U.S. were valued an estimated $272.3 million. A 522% tax on that is quite that stack of cash.