U.S. Sen. Joni Ernst this morning sided with Iowa’s other senator, Chuck Grassley, in calling for the Trump administration to remove the tariffs it imposed on steel and aluminum imports from Canada and Mexico.
And the Republican noted Wednesday morning it’s a “very good question” whether President Donald Trump’s continuation of those tariffs could impede Mexico and Canada from ratifying the proposed United States-Mexico-Canada, or USMCA, trade agreement.
Ernst headed a roundtable at Kinze Manufacturing’s Innovation Center in Williamsburg with about 20 Iowa farmers, manufacturers and business owners, organized by the Association of Equipment Manufacturers.
The other participants in the roundtable and a subsequent question-and-answer session detailed the harm some of the participants said they’ve faced both from the steel and aluminum import tariffs and retaliatory fees other countries have placed on agricultural exports.
Richard Dix, senior director for Kinze’s supply chain, said his company has seen an “unprecedented increase in the commodity price of steel” following the application of the import tariffs.
The result, Dix said, is that Kinze loses profitability, plus some of its ability to reward employees or develop new products.
“It’s all well and good to hear sound bites on national TV about sticking it to the Chinese, or this is a tax on the Chinese ... the bottom line is, we’re paying the price.”
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The United States imposed 25 percent and 10 percent tariffs on steel and aluminum imports, respectively, in March 2018, and let exemptions from those tariffs expire for Canada, Mexico and the European Union in May 2018.
Those governments responded with retaliatory tariffs amounting to billions of dollars, with affected products ranging from pork, soybean, corn and steel exports.
China also imposed retaliatory export tariffs after Trump proposed import tariffs as a response to its “unfair trade practices.”
Jeff Quint, owner of Cedar Ridge Winery and Distillery in Swisher, said the EU imposed a retaliatory tariff on whiskey exports right before his business was poised to ship multiple containers of product overseas. Quint said he ultimately cut the price of each container by about $25,000 so as to keep the order.
“Since these tariffs came in, we’ve been treading water (in Europe),” he said. “We were going to go into China, we’ve backed off entirely on that ... . We’re waiting to see if we can get this behind us and get back to making some money and exporting some products.”
Uncertainty over federal trade policy, including the timeline for new agreements, is “just killing us,” said Pam Johnson, a sixth-generation farmer in Floyd County and past president of the National Corn Growers Association.
Her biggest concern, she said, is the effect the uncertainty could have on the next generation of farmers.
“If you’ve got a great job in Chicago or anywhere else, why would you quit right now and come back when you’re not sure if you’re going to make a living?” Johnson posed. “It is just imperative for us to show Iowans that there is some certainty and that we can move forward, and we’re not giving a pass to all our competitors around the world.”
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Ernst said she cannot speak for what Trump might do regarding tariffs in the future but praised his style toward negotiating with the country’s trading partners — “if you call it a style.”
“He does toss out publicly the worst possible scenario, but what you do see is that he does get results from that,” she said.
Ernst said she is “cautiously optimistic” USMCA will be ratified within the current Congressional session and that, in speaking with U.S. Trade Rep. Robert Lighthizer, she believes the United States is close to reaching a trade deal with China, including over tariffs.
In a January guest column to The Gazette, Sen. Grassley called for the Trump administration to drop its tariffs on steel and aluminum imports from Canada and Mexico, saying retaliatory tariffs from the countries “stand to wipe out gains our farmers have made over the past two and a half decades.”
About 408,600 Iowa jobs — about one in five — depend on trade, according to the Business Roundtable, which last week reported $1.4 trillion and over 12 million jobs nationwide depend on trade with Canada and Mexico.
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