New Steel Tariffs Complicate Agriculture Trade

Mar 9, 2018  | 5 min  | Ep4329

Many in rural America, are concerned about a potential chain-reaction from the tariffs that go into effect in two weeks.

The entire Iowa Congressional delegation was concerned enough that they sent a letter to the President discouraging him from going forward.

However, one Iowan – previously a political football in the controversy over renewable fuels –is one-step closer to the frontlines and all that comes with it.

Peter Tubbs has the details. Producer contact -- peter.tubbs@iptv.org 

With the swearing in of former Iowa Secretary of Agriculture Bill Northey as USDA Under Secretary of Farm and Foreign Agricultural Service, U.S. Secretary of Agriculture Sonny Perdue filled an empty position on his organizational chart after a nearly five-month delay. However, the Secretary still faces a plate full of challenges. 
Under Secretary Northey is the first to hold the title, which covers international trade of American agricultural products. That trade environment grew cloudier this week after President Trump enacted tariffs on imported steel and aluminum. 
President Donald Trump: "Today, I'm defending America's national security by placing tariffs on foreign imports of steel and aluminum. We will have a 25% tariff on foreign steel and a 10% tariff on foreign aluminum. When the product comes across our borders, it's a process called dumping."
European Union leaders promised to retaliate. 
Donald Tusk, President of the European Council: "President Trump has recently said, and I quote: 'Trade wars are good and easy to win'. But the truth is quite the opposite: trade wars are bad and easy to lose. For this reason I strongly believe that now is the time for politicians on both sides of the Atlantic to act responsibly."
While the European Union represents less than 10 percent of global steel production, it is the largest source of imported steel for the United States. The White House has floated a tariff carve-out for Canada and Mexico if the renegotiations of NAFTA are successful. Canada and Mexico are the second and fourth largest sources of steel for U.S. manufacturers. 
The steel industry has seen declining wholesale prices over the last five years as capacity grows and plant utilization declines. China, which produces almost half of the world’s supply, has been blamed for most of the surplus pushing prices down. The U.S. imports only 2 percent of its steel directly from China. 
Secretary of Agriculture Sonny Perdue sees the tariff tiff as part of a larger struggle over trade.
Sonny Perdue, U.S. Secretary of Agriculture: “So I think he’s in a position to position the United States. He believes solely in his heart America First and American People first, and that includes American agriculture, and that’s what he’s working toward. He wants a good deal with NAFTA, I think we’ll get one, I think even this effort this past week may put us in a better position to get a better deal in NAFTA than we would have gotten otherwise.”  
Domestic critics of the tariff plan abound, even on the Republican side of the aisle.
Sen. Charles Grassley, R-Iowa: “The economy is on the right track thanks in large part to President Trump’s leadership, but imposing tariffs could wipe away all this progress as quickly as it would take the President to sign his name.”

Rep. Paul Ryan, Speaker of the House: "The president's right to point out that there are abuses. There clearly is dumping in transshipping of steel and aluminum. That's absolutely happening. There's a big over-capacity problem. Let's go focus on that. Let's go focus on the abusers of that and that is why we think that the proper approach is a more surgical approach so that we do not have unintended consequences.
Voices on both sides of the Atlantic are hoping the President steps away from a trade war. However, EU Commission President Jean-Claude Juncker is prepared to fight back.  
Jean-Claude Juncker, EU Commission President (March 2, 2018): “This is basically a stupid process, the fact that we have to do this. But we have to do it. We are now imposing tariffs on motorcycles, Harley Davidson, on blue jeans, Levis, on Bourbon. We can also do stupid. We also have to be this stupid.” 
For Market to Market, I’m Peter Tubbs

 

Grinnell Mutual Insurance
Sukup
Accu-Steel
ICN