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Drew Klein

The Trump administration says that its tariffs on Chinese imports will help the American people – especially working men and women, farmers and small business owners.

In reality, the tariffs, and the retaliatory tariffs they provoked, are having the opposite effect, hurting the people the administration claims to be helping. They are hitting our state’s farmers especially hard – including those who sell soybeans and pork – because they rely heavily on trade with China. If the administration really wants to help the American people, it should capitalize on the U.S.-China trade talks now underway to eliminate these destructive tariffs.

A study last fall by Iowa State University’s Center for Agricultural and Rural Development estimated a potential loss of up to $2 billion in the short-term for our state as a result of the administration’s tariffs and the retaliatory tariffs that followed. Hardest hit will be the pork/hog, soybean and corn industries.

Wilton farmer Dave Walton said that the tariffs have damaged relationships between Iowa farmers and their Chinese customers: "The thing that gives me heartburn is that we’ve spent 30-plus years building personal relationships with China ... we’re giving opportunities to our competitors around the globe to steal our market share."

John Gilbert, a Hardin County livestock, dairy and grain farmer, cited the tariffs as the source of recent economic troubles: "Our income is going down and our costs are going up."

The retaliatory tariffs are also hurting Iowa distillers. According to Jeff Quint, owner of Cedar Ridge Winery in Swisher, his company is losing out on profits thanks to the tariffs; as a result, he was forced to reduce prices on recent orders to France and Denmark: "We ended up having to discount both of those shipments in order to keep the deal .. We ate the bulk of it. So yeah, it’s definitely affecting the bottom line."

Iowa’s farmers and distillers aren’t the only ones getting squeezed. The administration’s steel and aluminum tariffs have also hurt our state’s workers and businesses. The Black Cat Wear Parts factory in DeWitt was forced to lay off 10 of its 17 workers, reduce production, and delay expansion plans in response to the tariffs. According to the factory’s manager Josh Daniel, "There were some growth opportunities we have been looking at, with new opportunities for manufacturing in DeWitt. But the capital equipment that was planned, that’s been put on the back burner a bit until the tariff situation resolves itself."

Things could get even worse for millions of Americans. The three-month postponement the administration announced late last year expires on March 1. Without a deal or another delay, tariffs on many Chinese imports will rise from 10 percent to 25 percent.

A study by ImpactECON, a firm that provides global economic analysis, showed what could happen if the Trump administration implements the full range of its threatened tariffs: American households would lose an estimated $2,357 on average in 2019, amounting to $17,276 between 2018-2030, and 2.75 million workers could lose their jobs – many of whom work in agri-business.

These tariffs are a tax on American consumers and businesses. They have provoked retaliation from China and others, making it more difficult for exporters like Iowa farmers and manufacturers to sell their goods overseas.

China’s ongoing theft of intellectual property and its policies that force technology transfers are real challenges that need to be addressed in the U.S.-China negotiations. We should also work with our allies and the World Trade Organization to address these barriers. Imposing new barriers won’t do the trick.

If the administration truly wants to help Iowans, it must seize the moment in trade talks with China to eliminate, rather than create, obstacles to trade.

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Drew Klein is Iowa state director of Americans for Prosperity.