A leading Iowa maker of agricultural equipment today warned of the impact on Iowa’s manufacturing sector from a trade dispute between the U.S. and China.
On March 23, the United States put a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum. In response, China placed retaliatory tariffs of 15-25 percent on 128 American products, including pork.
Additional threatened tariffs from both sides are now in play.
Steve Sukup with Sukup Manfacturing, along with representatives of Iowa’s pork and soybean producers joined Gov. Reynolds at her weekly news conference to warn of the dangers of the additional tariffs to Iowa’s farm economy.
Sukup Manufacturing in Sheffield makes grain drying and storage equipment.
Vice-President Steve Sukup says the trade dispute is already depressing prices for some Iowa farm products, which could hamper demand for grain bins.
At the same time, Sukup is already paying more for steel to make the bins.
“We use over 1 million pounds of steel per week and we've seen increases of steel prices since last November of 40 percent,” Sukup said. “It’s obvious that rising material costs and a shrinking market will cause problems.”
Sukup says so far his company has relied on U.S.-made steel. But Sukup Manufacturing is charging farmers 20 percent more for its products to accommodate the higher input costs.
So far farmers aren’t backing off their orders.
“We haven’t had any cancellations,” Sukup said. “Everybody’s still optimistic they'll still be planting this spring.”
Gov. Reynolds and representatives of Iowa’s major farm groups warned of the impact on Iowa’s farmers if the tariffs push exports down.
“One in three hogs raised in Iowa and one in three rows of corn and soybeans are exported,” Reynolds said. “Agriculture is heavily dependent on our ability to move our products well beyond our borders.”
"China's proposal to add tariffs to soybeans adds to uncertainty US farmers face right now as we head into this planting season," said Iowa Soybean Association President Bill Shipley. “If allowed to take hold, it could jeopardize the ability of US farmers to do business in China for generations.”
The proposed tariffs will not go into effect for at least 60 days. Gov. Reynolds said her administration will be submitting comments to the Trump administration during the comment period that ends on May 21.