The 25 percent tariff on steel imports to the U.S. signed by President Donald Trump is having a negative impact on American farmers.
What happened to the price of steel?
The tariffs have caused the price of steel to jump significantly, which is directly impacting manufacturers of farming equipment. The price of steel used by company A&P Grain to make steel bins jumped by 20 percent since the start of the year. Sukup Manufacturing in Sheffield, Iowa, saw steel prices rise by twice that much since November. Other equipment manufacturers including Deere & Co (the maker of John Deere tractors) and Caterpillar Inc. have also been impacted.
This in turn has caused some manufacturers of agricultural equipment to raise their prices and pass some of that cost on to farmers.
Dennis Slater, the president of the Association of Equipment Manufacturers, told Reuters, “This has a huge effect on livelihood of the farmer right now, and at the same time it has a huge impact on manufacturers.”
Even companies that get steel from within the United States or from Canada, Mexico, and other nations exempted from the tariffs have seen prices jump.
Some companies that have managed to keep prices the same for now are worried.
Deere CEO Samuel Allen told Reuters that his company “will have to absorb the price increase and cut costs elsewhere,” and that the retaliatory tariffs that China has threatened to implement could add to the problems facing farmers.
What's the history?
On March 8, Trump signed a 10 percent tariff on all aluminum imports to the United States. and a 25 percent tariff on all steel imports. When he signed the tariffs, Trump did so at the urging of U.S. steel and aluminum companies.
“If you don’t have steel, you don’t have a country,” he said when he announced the new trade policy.
When the tariffs were signed, more than 100 Republican members of Congress signed a letter on March 7 to “express deep concern about the prospect of broad, global tariffs on aluminum and steel imports.”
The letter urged President Trump to “reconsider the idea of broad tariffs to avoid unintended negative consequences to the U.S. economy and its workers.”