Why should ethanol be made in the Midwest, when there are much more efficient feedstock (sugar cane) in the tropics, which are effectively prevented entry to the US by tariff barriers.

Because there is a real benefit in not swapping our dependence on oil from Saudi Arabia, Iraq, etc. for dependence on ethanol from Brazil or anywhere else. I'd rather drive my car on fuel sold by American farmers than by Hugo Chavez. I know this position makes no sense to economists who argue in favor of the most efficient producer, but the world is still a hostile place and reducing our dependence on foreign energy sources seems like a good idea.