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Trade Trade war - Tariff hits US farmers

Steel News - Published on Mon, 16 Apr 2018

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Reuters reported that steel price jumped after US president announced tariff. throughout US 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 US 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. Mr Strom said that "Would that price destroy us? No, But these days, you have to be smart about your expenses."

The metals tariffs also hitting makers and sellers of farm equipment, from smaller firms like A&P Grain to global giants such as Deere & Co and Caterpillar Inc. Such firms are struggling with whether and how to pass along their higher raw materials costs to farmers who are already reeling from low commodity prices amid a global grains glut.

A&P Grain President Dave Altepeter said “The steel used in their bins is made in the United States, but domestic steel prices also have soared because of the tariffs. US steel mills typically adjust their prices once a year, normally in the first quarter but this year, those prices have jumped four times. The price of steel used in A&P's grain bins has jumped about 20 percent since January 1. Any time there's any type of negative talk that affects the steel mill, they've raised the price.”

US competitors Brazil, Argentina and Russia have all raised grain output in recent years, eating into the U.S. share of global markets. Mexico imported ten times more corn from Brazil last year and is set to buy even more in 2018 on worries that renegotiations of the NAFTA trade pact could disrupt their U.S. supplies. Strom said he has also pushed back plans to build a new metal storage building to house his planter and the combine head he uses for harvesting corn and soybeans. Other farmers, food producers and beer makers have scrambled to finalize deals for steel-based equipment before prices climb more.

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Posted By : Nanda Koijam on Mon, 16 Apr 2018
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