This Friday marks the day of trade sanctions between the United States and China. The tariffs include $34 billion worth of exports from each nation. The US tariffs imposed on China will include more than 800 products while Beijing will be targeting 545 American products. Later in the summer the United States is planning to impose $16 billion more in tariffs which China will respond to accordingly with another equal set of tariffs against US exports. With the looming tariffs on the horizon China may experience a few setbacks as they ambitiously try to increase bio-fuel usage in the country by 2020. Chinese government is planning to roll out E-10, gasoline containing 10 percent of ethanol coming from corn. However with tariffs near, the Chinese government wants to build new ethanol plants to aid in the production of E-10. COFCO (China's State Development and Investment Corporation) an agribusiness that has been awaiting approval of permits from the government on when they can begin, but will probably wait till the full force of these sanctions takes place. The amount of corn needed to start this roll out would be a quarter of the current annual demand, about 45 million tons. As Chinese corn stockpiles have dwindled in recent years, the corn used for the roll out would push up against demand for food supplies, which would leave little cushion for demand to increase. As the United States is one of China's top suppliers of corn imports, they will apply stiff tariffs on them starting Friday as well. These sanctions may drive Chinese corn prices higher in the short term as their stockpiles will continue to grow as domestic demand rises. One lingering question would be if corn becomes difficult/costly to acquire when does the conversation begin about potentially importing ethanol from the United States and what impact will these tariffs have on prices domestically in the U.S. as well as China?