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Agriculture Reacts to Tariffs With Fear, ‘Profound Disappointment’
President Donald Trump signed executive orders enacting new tariffs on Thursday, taking the next step toward fulfilling one of his campaign promises.
The order is expected to take effect within 15 days imposing a 25% tariff on imported steel and a 10% tariff for aluminum. For now, Canada and Mexico are exempt, but Trump said depending how NAFTA negotiations go, the arrangements could change.
“We’re sticking with 10 and 25 initially. I’ll have the right to go up or down depending on the country. And I’ll have a right to drop out countries or add countries,” Trump said.
According to a Reuters report on Thursday, officials in both Canada and Mexico indicated they wouldn’t be pressured by tariff threats as NAFTA talks continue.
In anticipation of the announcement, Secretary of Agriculture Sonny Perdue said the ag industry is “rightfully concerned” at a recent meeting at USDA headquarters. “There is probably some legitimate anxiety over the trade issues.”
A statement on Wednesday from the National Farmers Union said it is “concerned the administration’s tactics threaten U.S. relationships with top trading partners and, consequently, the ability of the country to establish fair trade policies.”
A recent Reuters report quoted U.S. farmers saying they feared a potential trade war. “These tariffs are very likely to accelerate a tit-for-tat approach on trade, putting U.S. agricultural exports in the cross-hairs,” said Brian Kuehl, executive director of Farmers for Free Trade.
The organization released a statement after the executive order was signed saying, “We expect that these tariffs will cause retaliation that will come out of the pockets of American farmers.” The statement concluded with a promise to demonstrate the negative effects of the tariffs in the upcoming months.
Iowa farmer and president of the American Soybean Association (ASA) John Heisdorffer called the tariffs “a disastrous course of action” echoing fears of retaliation from valuable trade partners.
Farmers aren’t the only ones frustrated by the new tariffs. “The equipment manufacturing industry is profoundly disappointed at President Trump’s actions today to advance import tariffs on steel and aluminum. Steel accounts for roughly 10% of equipment manufacturers’ direct costs,” explains a statement released by the Association of Equipment Manufacturers (AEM). “The price of steel has already risen in anticipation of the administration’s actions, and a 25% tariff will only further erode the progress our industry has made over the past year.”
AEM says the tariffs put “manufacturers at a competitive disadvantage, risk undoing the strides our economy has made due to tax reform, and ultimately pose a threat to American workers’ jobs.”
Trade Partners Threaten Retaliation
As trade partners around the anticipated move first announced last week, many threatened retaliation.
European Financials Affairs Commissioner Pierre Moscovici said, “If Donald Trump puts in place the measures this evening, we have a whole arsenal at our disposal with which to respond.”
“We have heard directly from the Chinese that U.S. soybeans are prime targets for retaliation,” the ASA statement says.