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

Chinese Foreign Ministry Spokesperson Lu Kang on Wednesday said, “We consistently oppose any country adopting unilateral sanctions based on its own domestic laws and regulations and the wrong method of exercising long-arm jurisdiction.”

Sanctions on 13 companies were triggered after U.S. President Donald Trump designated North Korea a state-sponsor of terrorism. Among the targeted companies was Dongyuan Industrial, which the U.S. Treasury Department said was working with front companies “for weapons of mass destruction-related North Korean organisations.”

Dongyuan was also sanctioned for exporting more than $28 million in goods including items linked to nuclear reactors to North Korea. The Treasury added that three companies alone had engaged in more than $750 million worth of business with the Hermit Kingdom, which involved computers, iron and coal.

Generally speaking, these new sanctions ban companies from using U.S.-linked bank accounts and they prevent foreign firms from doing business with such organizations.

The latest round of sanctions places a strain on what appeared to be a cooling of Sino-American relations. During President Trump’s recent visit to Asia, he urged his Chinese counterpart Xi Jinping and other leaders to take stronger efforts at curtailing North Korea’s nuclear weapons program. Trump even said Xi was working hard on that front. But China remains North Korea’s biggest trading partner, and some analysts believe Washington’s latest move on Chinese companies — even those with suspected ties to terror– may cause Beijing to step back.

“Trump will continue to use trade and investment issues to pressure China on North Korea,” says Shou Huisheng, a researcher with Tsinghua University’s National Strategy Institute, in an interview with the South China Morning Post. “It is a very easy-to-use tactic for Trump, which may help him address the North Korean issue, but at the cost of failing to solve the root causes of the US-China trade imbalance.”

Still, Trump’s latest efforts may ultimately set the stage for a massive internal blow to the North Korean regime, whether China is behind it or not.

“We had a frank exchange here in China on maritime security issues and the South China Sea,” Tillerson told reporters during President Donald Trump’s visit to Beijing on Thursday.” The U.S. position remains unchanged.”

He added, “We insist on upholding freedom of navigation, that claimants be consistent with international law and that claimants should stop construction and militarization of outposts in order to maximize prospects for successful diplomacy.”

China lays claim to virtually the entire area— a strategic waterway through which more than $3 trillion in trade passes through each year, and spotted with islands housing oil and gas fields. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also lay claims to parts of the South China Sea. In the past, China has caught the eye of the international community for creating artificial islands in the region and increasing its military presence there.

The Obama Administration responded to these efforts by sending U.S. warships to conduct freedom of navigation patrols—a move stepped up by President Trump.

The thorny issue is likely to come up as Trump completes his five-nation tour across Asia. He’s set to take part in two regional summits in Vietnam and the Philippines. The latter recently sued China over their claims to the South China Sea. Their view was backed by an international arbitration court. Philippine President Rodrigo Duterte said on Wednesday he will ask China to come clean with its true intentions in the South China Sea, even though he’s typically brushed the issue aside during his past sixteen months in office.

But according to China’s Foreign Ministry, Trump and China’s President Xi Jinping have expressed a commitment to maintaining peace on the South China Sea.

“Both sides support the protection of freedom of navigation and overflight for all countries, in accordance with international law,” it said in a statement. “The United States has angered China with freedom of navigation patrols close to Chinese-controlled islands in the South China Sea, which have been continued by the Trump administration.”

China said Thursday the United States should “abandon its biased views” towards the country, as it hit back at cutting remarks made by US Secretary of State Rex Tillerson. Ahead of his visit to India next week, President Donald Trump’s top diplomat stated the US preference to work with New Delhi over Beijing during the next…

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US Secretary of State Rex Tillerson promised India a new century of “strategic partnership” on Wednesday, accusing its Asian rival China of undermining international order. Setting the stage for an upbeat visit next week to Delhi, Washington’s top diplomat drew an explicit comparison between China and the world’s “two greatest democracies.” Washington and India have been…

China’s state run Global Times, which is often filled with nationalistic and pro-military rhetoric, recently ran an editorial calling for peace. It read, “Washington and Pyongyang have been intensifying hostile and threatening rhetoric against each other for some time. Their frequent saber-rattling, unimaginable in the past, is escalating tensions in Northeast Asia,”

No stranger to speaking his mind, President Donald Trump on Saturday issued to North Korea what many called a warning of war. Via a Twitter post, he slammed his predecessors for decades of failed negotiations and monetary incentives that only made the North Korean war machine stronger. “ … agreements violated before the ink was dry, makings fools of U.S. negotiators. Sorry, but only one thing will work!” he Tweeted.

Later on Tuesday, the U.S. sent two Air Force B-1B Lancer Bombers over the Korean peninsula — perhaps even visible from Kim Jong Un’s throne. The Hermit Kingdom has recently come under more sanctions after testing nuclear devices.

But for China, the war games and shouting matches are getting all too real.

Another state-run paper The People’s Daily ran an editorial warning, “War on the Korean Peninsula would be catastrophic, and dialogue remains the best option.” And although the article acknowledged “logic behind Trump’s threats,” it concluded that war can’t be the answer.

A day before that editorial ran, Hua Chunying said at a press conference, “The current situation on the Korean Peninsula remains highly complex and severe. We hope that various parties can strictly observe and implement the UN Security Council resolutions, refrain from provoking each other and aggravating the contradiction, exercise restraint and caution to ease the tension.”

“I applaud China for breaking off all banking relationships with North Korea, something that people would have thought unthinkable even two months ago,” Trump said. “I want to thank President Xi.”

For years, China has remained North Korea’s largest trading partner and virtually its only military ally. Beijing’s banks and financial institutions elsewhere have served as a lifeline for the nuclear armed “Hermit Kingdom”– often characterized by a burgeoning military and an impoverished populace.

The Treasury Department recently announced new sanctions on eight North Korean banks, 26 people in China, and three other countries the Trump administration says have been funneling money to the dictatorship.

Speaking before the Rose Garden, Trump called upon the nations of the world to band together against the nuclear threat of North Korea.

“North Korean nuclear weapons and missile development threaten the entire world with unthinkable loss of life,” Trump said. “All nations must act now to ensure the regime’s complete denuclearization.” That has been the diplomatic Holy Grail which none of the former real-estate mogul’s predecessors have ever found.

But, Trump says change is coming.

Beyond tougher sanctions imposed on Pyongyang by the UN within the last two months, the U.S. is also pressuring nations to isolate themselves from North Korea even if its severing the slightest of trade, banking and diplomatic ties.

“I appreciate the United Nations Security Council voting twice, unanimously — 15 to nothing, twice — to adopt hard-hitting resolutions against North Korea,” Trump said Tuesday. “I have recently issued tough new sanctions against those who do business with this outlaw regime. And I applaud China’s latest action to restrict its trade with North Korea.”

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

President Donald Trump had been relying on China to pressure North Korea into dialing back its aggressive nuclear and military programs in the midst of ongoing missile launches by the Hermit Kingdom. But the commander-in-chief of the world’s strongest Army seems to be losing his patience.

Trump took to Twitter Monday and posted “While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out. At least I know China tried!”

But the president’s next move could cause more tension between the planet’s largest economies. China remains North Korea’s most important trading partner accounting for 70% of Pyongyang’s total trade and supplying the nuclear-armed nation with essential goods such as food and energy, according to the Congressional Research Service.

An editorial that ran in the state-run Chinese newspaper Global Times warned of “friction” between the U.S. and China if Washington imposes sanctions on the Communist nation’s companies.

The ongoing battle follows the death of Otto Warmbier, a 22-year-old University of Virginia student who died recently after spending 18 months in a North Korean prison before coming back home in a comma after action by president Trump to have him released.

The student had been handed a sentence of 15 years of hard labor for stealing a propaganda poster.

North Korean authorities said he fell into a coma after suffering from botulism following ingestion of a sleeping pill. However, doctors who examined him the in the U.S. found evidence of severe tissue loss from his brain.

His death pushed several lawmakers to call for strict backlash against North Korea and to hold the rogue state accountable for the death of the young man.

Sen. John McCain in a statement Monday said “Otto Warmbier, an American citizen, was murdered by the Kim Jong-un regime. In the final year of his life, he lived the nightmare in which the North Korean people have been trapped for 70 years: forced labor, mass starvation, systematic cruelty, torture and murder.”

He also accused North Korea of “destabilizing the Asia-Pacific region, and rapidly developing the technology to strike the American homeland with nuclear weapons. Now it has escalated to brutalizing Americans, including three other citizens currently imprisoned in North Korea. The United States of America cannot and should not tolerate the murder of its citizens by hostile powers.”

Young Pioneer Tours, the China-based group that organized Warmbier’s trip, announced it would no longer take Americans to the country.