Farmers, manufacturers feeling pinch from retaliatory tariffs05/02/2019 | Soybean Exports, Soybean News, Ag Awareness, Economics
By Bethany Baratta, ISA senior writer
Retaliatory tariffs have a trickle-down effect, not only impacting direct buyers of ag products, but businesses, employees and families. And in a state like Iowa, where one in five jobs is directly tied to trade, tariffs have a big impact.
“As we know, tariffs are threatening these jobs by adding additional expenses and putting less money in the pockets of our farmers and our manufacturers,” said Iowa Republican Senator Joni Ernst at a trade town hall gathering in Williamsburg recently. “It really is time for this practice to stop.”
Hosted by Kinze Manufacturing, Inc. and sponsored by American Equipment Manufacturers, the event was part of a series organized by Tariffs Hurt the Heartland. Senator Ernst and a host of other leaders were invited to make comments.
The trade retaliations and the uncertainty of the U.S.-Mexico-Canada Agreement (USMCA) have put an additional strain on farmers, said John Heisdorffer, chairman of the American Soybean Association (ASA).
“We’ve tightened the belts, and I don’t know that we can tighten them too much more,” said Heisdorffer, who farms with his family near Keota. He previously served as president and vice president of the ASA.
“There’s so much uncertainty out there in the countryside… Some neighbors are unable to get operating loans this spring, so they aren’t farming anymore. It’s changing the fabric and the makeup of Iowa,” said Pam Johnson, a sixth-generation Floyd County farmer and former president of the National Corn Growers Association.
The aluminum and steel tariffs need to be lifted and the USMCA needs to be ratified and signed, the farmers said.
“It is so critical that we get that trade agreement (USMCA) with Mexico and Canada passed and we lift those steel and aluminum tariffs from our allies so we can move forward and let that be a template for what’s to come so America can prosper,” Johnson said.
“Canada and Mexico are our two closest neighbors, we ought to do a lot of business with those countries, there’s no reason not to,” said Heisdorffer, who is planting his 47th season of crops this spring. “I’m hoping to get some of these trade things that we’ve been negotiating for almost a year… taken care of so we can get back to what we think is a normal situation.”
Retaliatory tariffs are impacting manufacturers, too, said Richard Dix, senior director of supply chain for Kinze Manufacturing, Inc. He said tariffs are essentially taxes, which flow through the supply chain. It forces the company to evaluate how they deal with those new taxes — pass them through the supply chain or adjust the makeup of the company?
“As a business, we’re forced to make difficult decisions because money is being syphoned away from the company that could go to new products, new employees, new markets, new investment. Instead they’re going toward a tax that essentially hurts the market, hurts our customers as farmers and hurts our business,” Dix said.
Close to a deal with China?
Various media outlets report that the United States and China will likely resolve their trade dispute within the next two weeks, as suggested by White House chief of staff Mick Mulvaney.
Speaking at a conference in California, Mulvaney said a resolution — one way or another — could be made soon.
“It won’t go on forever,” Mulvaney said at the Milken Institute Global Conference. “I think at some point in any negotiation you realize, ‘OK: we’re close to getting something done so we’re going to keep going.’ On the other hand, at some point you just throw your hands up and say ‘you know this is never going to get anywhere.’”
“I think you’ll know one way or the other in the next couple weeks,” he said. “I think that’s probably fair.”
Contact Bethany Baratta at firstname.lastname@example.org.
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