Tariffs on aluminum and steel are hurting farmers, and that’s before the retaliatory tariffs from China on American agricultural products kick in. From Tyler Durden at zerohedge.com:
The tariffs that President Trump vowed to put in place while campaigning – and followed through on – like many government solutions, are solving one problem while creating others at the same time. In this case, the “unintended consequences” from steel tariffs are hurting agricultural jobs across the Midwest, putting pressure on some of the most vehement supporters of President Trump.
A Reuters expose released this morning reveals how how tariffs – as well-intentioned as they may have been – have led to higher cost of goods for farmers across the country.
The authors tell several personal stories, including that of a farmer who was about to purchase a $71,000 grain mill, but had to hold off on the purchase because the seller raised the price 5% to account for the rising price of steel:
Lucas Strom, who runs a century-old family farm in rural Illinois, canceled an order to buy a new $71,000 grain storage bin last month – after the seller raised the price 5 percent in a day.
The reason: steel prices jumped right after U.S. President Donald Trump announced tariffs.
Throughout U.S. farm country, where Trump has enjoyed strong support, tariffs on steel and aluminum imports are boosting costs for equipment and infrastructure and causing some farmers and agricultural firms to scrap purchases and expansion plans, according to Reuters’ interviews with farmers, manufacturers, construction firms and food shippers.
The impact of rising steel prices on agriculture illustrates the unintended and unpredictable consequences of aggressive protectionism in a global economy. 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.
A&P Grain Systems in Maple Park, Illinois – the seller of the storage bin Strom wanted to buy with a neighboring farmer – raised its price two days after Trump announced aluminum and steel tariffs on March 1 to protect U.S. producers of the metals. Strom and his neighbor backed out.
To continue reading: How Trump’s “Doom And Gloom” Tariffs Are Crippling American Farmers