U.S. imposes import duties on steel and aluminum

Lucas Strom runs a century-old family farm in the Illinois countryside. Last month he canceled a $71,000 purchase of a new granary because sellers raised prices by 5% in one day.

Reasons for the seller’s price increase: After the US President announced tariff measures, steel prices immediately jumped.

According to interviews with peasant households, manufacturers, builders, and food transporters, the levy of duties on imported steel and aluminum products has already led to an increase in equipment and infrastructure costs in the US agricultural region, forcing some farmers and agricultural companies to abandon purchase or expansion plans. . Trump enjoys a very high support rate in the U.S. agricultural region.

The impact of rising steel prices on agriculture reflects the unexpected consequences of radical protectionism under the global economic system. In addition, U.S. farmers are also worried that China will threaten the direct impact of retaliatory tariffs on grains such as sorghum and soybeans, which are the most valuable agricultural products exported by the United States.

Strom and his neighbors had intended to buy a granary from A&P Grain Systems of Maple Park, Illinois. However, on March 1st, it announced that it imposed tariffs on imported steel and aluminum products to protect domestic producers. Two days later, the company increased its prices, and Strom and its neighbors canceled orders.

Taxes on imported metals also impacted manufacturers and distributors of agricultural equipment, from small companies A&P Grain to international giants Deere & Co (DE.N) and Caterpillar (CAT.N). These players are struggling to think about whether and how to pass on the increase in the cost of raw materials to farmers. At the time when the global cereal supply is in surplus, farmers have already been trapped in the turbulent city of low commodity prices.

As the world’s two largest economies, China and the United States have threatened each other in recent weeks to impose tariffs on billions of dollars worth of goods.

A tariff of 25% and 10% is imposed on steel-aluminum imports, mainly aimed at curbing imports from China. Temporarily exempted the EU and other six allies from this tariff, and then decided on May 1 whether to continue the exemption.

Dave Altepeter, president of A&P Grain, said that the containers they use are made from steel produced in the United States, but due to the tariff plan, domestic steel prices in the United States have also soared.

Altepeter said that US mills usually adjust their prices once a year, usually in the first quarter, but steel prices have risen four times so far this year.
 

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