Farmers concerned tariffs could impact ag exports

Sioux Falls, SD (KSFY) President Trump implemented a 25 percent tariff on all imported steel and a 10 percent tariff on all imported aluminum Thursday, a controversial move, even within the Republican Party.

All of South Dakota’s republican lawmakers in Washington urged the President to use caution in this policy, saying his announcement could have a big impact on industry in our region.

Several countries have already threatened retaliation on American products over this new tariff, which is especially concerning news for agriculture, our region's largest industry.

“We produce more than what our country needs,” South Dakota Senator Mike Rounds said.

“Sixty percent of what we grow in the United States is exported, so it’s more important for trade than it is for domestic uses,” South Dakota farmer and member of the National Soybean Association Kevin Scott said.

Soybean farmers are especially concerned about China's reaction to the President's new tariff.

“Half of our exports go to China; anytime there's a trade disruption like potentially steel or alumni tariffs, soybeans can get picked as a retaliatory item and we don't want that,” Scott said.

“If other countries say well if you're hurting our ability to sell our aluminum and our steel, the first thing they're probably going to come back at is the ag commodities that we produce in the United States,” Senator Rounds said.

Midwestern farmers say these trade discussions can impact their competitive edge in the global market.

“Discussion on those things have disrupted trade to the point where our customers for our products are looking at other options,” Scott said. “Brazil is equally able to grow that product, and we don't want that to be the route of choice for China. They already buy more beans from Brazil than they do the U.S. so we are competing with them [Brazil] directly and don't want to make it easier.”

President Trump has temporarily excluded Mexico and Canada from the tariff as NAFTA negotiations continue.

“Because we're unable to make a deal that’s fair for our workers and fair for our farmers, we love our farmers,” President Trump said during his address to the nation Thursday.

But those farmers fear the new policies could greatly impact commodity prices in the future.

“I want to make sure we don't do this in a vacuum,” Senator Rounds said. “Look at all of the consequences we'll have to put up with should he impose that tariff. I want our producers not to feel the impacts of a trade war.”
South Dakota’s Republican lawmakers and others from the region specifically asked the President to pinpoint specific countries causing problems with the steel and aluminum industry, rather than making the broad tariff.

“There’s still time for the President to reconsider, and I hope he does. I strongly support finding ways to use U.S. trade policy to our advantage to bolster American products and help American consumers, but I have serious concerns with the President’s non-surgical approach on tariffs. I’m worried the United States could face retaliatory action by other countries that results in collateral consequences on sectors and industries throughout the U.S. economy, particularly agriculture, South Dakota’s top industry,” South Dakota Senator John Thune said.

The President did say he is open to negotiating with induvial nations to remove the tariff. President Trump also said the new tariff is a fulfillment of his promise to improve the steel and manufacturing industry in America. However, most U.S. economists say the tariff could increase the cost of production for any American company that relies on aluminum and steel imports.

Iowa Senator Joni Ernst also believes the tariffs will hurt farmers.

"For one, you cannot build a grain bin out of a paper bag or plow a field with a toothpick. You see, our farmers rely on steel and aluminum for the products and equipment that make farms work,” Ernst said.

Senator Ernst says higher prices on farm products will drastically increase the cost of doing business.