Friday, April 13, 2018

Steel tariffs increase equipment prices for U.S. farmers

U.S. farmers are starting to see negative consequences from President Trump's new tariffs on Chinese-made steel and aluminum. The price of American-made steel has increased since the tariffs were announced and remains volatile, bumping up costs for farming equipment such as tractors and grain silos.

"The impact of rising steel prices on agriculture illustrates the unintended and unpredictable consequences of aggressive protectionism in a global economy," Tom Polansek and P.J. Huffstutter report for Reuters. "And the blow comes as farmers fear a more direct hit from retaliatory tariffs threatened by China on crops such as sorghum and soybeans, the most valuable U.S. agricultural export."

U.S. farmers are already working on thin to nonexistent profit margins, Reuters notes. The average farm income is less than half what it was before 2013 because of years of bumper corn and soybean crops that depressed prices. Other countries like Brazil, Argentina and Russia have increased grain exports in recent years, which means more competition and less money for U.S. farmers exporting their crops. Renegotiation of the North American Free Trade Agreement could affect sales further.

One Illinois farmer, a Trump voter named Allen Entwistle, said he decided to put off construction of an $800,000 grain storage system after manufacturer AGCO Corp. raised the price by 15 percent; he said he will have to instead store corn in bags on the ground instead. "President Trump keeps telling us he’s going to get a better deal," Entwistle told Reuters. "When are we gonna make it better?"

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