Saturday December 14, 2019
Home Lead Story Farm Equipmen...

Farm Equipment Manufacturers Across U.S. Worry About Tariffs on Aluminum and Steel

“We’re not really that big, so we can say that this impact has been a seven-figure impact for us in the last year, and that’s a substantial amount of money.”

0
//
U.S.
Workers ride through an aluminum ingots depot in Wuxi, Jiangsu province, China, Sept. 26, 2012. President Donald Trump imposed tariffs on aluminum and steel in March of 2018, with the goal of boosting U.S. production. VOA

Their iconic blue-colored planters and grain cars are recognizable on many farms across the United States. They are also easily spotted in large displays, some stacked one on top of the other, in front of Kinze’s manufacturing hub along Interstate 80, where, inside buildings sprawling across a campus situated among Iowa’s corn and soybeans fields, the company’s employees work with one key component.

“Steel is the lifeblood of Kinze,” says Richard Dix, a company senior director. “We’re a factory that’s essentially a weld house. We cut, burn, form, shape, cut, paint steel.”

Steel now costs more, the result of a 25 percent tariff on the material imported from most countries, including China.

“When there is a tariff on steel it cuts rights to the core of our fundamental product construction,” says Dix.

In March of 2018, President Donald Trump imposed tariffs on aluminum and steel, with the goal of boosting U.S. production and related employment.

While there has been a modest benefit to the domestic steel industry, Dix says increased costs are negatively impacting smaller manufacturing companies like Kinze.

“We see the bills that come in from our suppliers are higher based on those tariffs,” Dix explains. “Not just in steel but also in a lot of the electronics, rubber commodities and other agricultural parts we buy from China as well. Those tariffs take their effect on our cost structure, on the profitability for the family, through our employees, and now to our dealers and on to our customers.”

Those customers are mostly U.S. farmers who use some of Kinze’s products to put soybean and corn seeds into the ground. Soybean exports in particular are now subject to retaliatory tariffs imposed by the Chinese, one of the biggest export markets for U.S. farmers, which has sunk commodity prices and contributed to another year of overall declining income for U.S. farmers.

FILE - farmer Michael Petefish walks through his soybeans at his farm near Claremont in southern Minnesota.
farmer Michael Petefish walks through his soybeans at his farm near Claremont in southern Minnesota. VOA

​That means many are less likely to purchase the products Kinze makes.

“The market is substantially down,” says Dix. “The farmers don’t have that level of security they need to go out into the dealerships and buy that equipment. We get a one-two punch. We pay more for the product that comes into us and therefore on to the customer, and then we have a reciprocal situation where we can’t export what was advantageous to us.”

These are some of the concerns Dix explained to Iowa Republican Senator Joni Ernst, who participated in a roundtable discussion at Kinze along with farmers and others in Iowa impacted by tariffs. It was part of a “Tariffs Hurt the Heartland” event hosted by Kinze, and organized by the group Americans for Free Trade along with the Association of Equipment Manufacturers.

Ernst says the personal stories she gathers from these meetings go a long way in helping President Donald Trump understand the impact on her constituents.

“He has a very different negotiating style,” she told VOA. “He wants to start with the worst possible scenario, and negotiate his way to a good and fair trade deal, but again sharing those stories is very important and yes it does have an impact. I think the president does listen.”

Ernst says she is encouraged by news from the Trump administration on developments in negotiations that lead her to believe the trade dispute with China, and the related tariffs, could end soon.

“When I last spoke to [U.S. Trade Representative] Robert Lighthizer, he had indicated that the deal with China is largely done, it’s just figuring out the enforcement mechanism, and that is what the United States and China are really bartering over right now.”

But Kinze’s Richard Dix says one year under tariffs has already taken a toll on the company’s operations.

“We’re not really that big, so we can say that this impact has been a seven-figure impact for us in the last year, and that’s a substantial amount of money.”

Also Read: Scientists Facilitate The Regulatory Process For Herbal Drugs

It’s an amount that Dix says, so far, hasn’t been passed on to Kinze’s customers, or the employees.

“We have not actually had any direct layoffs that are attributable to this tariff situation, but we’re all tightening our belts.” (VOA)

Next Story

This Bamboo Entrepreneur from Philippines Aims at Tackling Poverty and Climate Change

Philippines Bamboo Entrepreneur Digs In on Poverty and Climate Threats

0
Bamboo
Bambuhay, a company in Philippines has sold nearly 400,000 reuseable bamboo straws. Lifetime Stock

Mark Sultan Gersava grew up in poverty, one of 12 children of a slash-and-burn subsistence farmer in the Philippines province of Sultan Kudarat.

Today he is the “chief executive farmer” of a company aimed at tackling that same poverty, and combating climate change at the same time.

His firm Bambuhay helps farmers shift from slash-and-burn agriculture – which accounts for about a third of deforestation in the Philippines – to growing bamboo, now in demand as an alternative material to throw-away plastic.

The company, now in its second year of operation, makes popular bamboo straws, toothbrushes, tumblers, and bamboo-based charcoal briquettes, to replace those made from wood.

So far Bambuhay has sold nearly 400,000 reuseable bamboo straws, Gersava said.

In late October, wearing a bamboo salakót, a traditional farmers hat, he told delegates to the One Young World conference of youth leaders in London what drove him to launch his company.

“In the span of one year, I experienced two super typhoons (and) the hottest measured temperature in Philippines history,” Gersava said.

Bamboo forest
A bamboo forest is pictured behind Suntory Holdings’ Yamazaki Distillery in Shimamoto town, Osaka prefecture, near Kyoto. VOA

“This was the first time I had faced the direct consequences of climate change,” he said.

Less Poverty, Fewer Emissions

Gersava settled on bamboo – a fast-growing plant that absorbs large amounts of climate-changing carbon dioxide and can help prevent soil erosion – as a way of taking action on both climate change and poverty.

The Philippines climate, he said, is perfect for growing the giant grass and has helped poor farmers “become agri-preneurs.”

The effort has helped cut extreme poverty for thousands of farmers so far, he says.

“Bamboo is a symbol of poverty in the Philippines. If you live in a bamboo house, you’re very poor – that’s basically how it was before,” he told the Thomson Reuters Foundation.

“But bamboo now has gained a lot of good attention since I started the company,” he said.

Bambuhay has partnered with the Philippines government and farmers to replant 540 hectares (1,340 acres) of deforested land through the company’s Bamboo AgroForestry Program, Gersava said.

Just how versatile bamboo fibre can be was evident in the entrepreneur’s own attire at the conference, including a sleek bamboo wallet and his cone-shaped hat, a golden salakót.

Such hats are usually made from reeds, but his was produced by farmers from bamboo – a gift in gratitude for his help in pulling them out of poverty, he said.

“When I wear this hat, I feel connected to the farmers. They are the one who are left behind,” Gersava said.

“They are the most important people that we that we need to protect. … We need to value these people more.”

Bamboo Business

Plastic bamboo
Bamboo straws stored in a jar on a table at the Copacabana restaurant on Yoff Virage beach in Dakar. VOA

Last year, Gersava sold his condominium, quit his job and with no formal business training and just $2,000 in start-up funds launched Bambuhay, his social enterprise.

“It’s very hard to start a business in the Philippines,” he said.

“There’s no support from the government, you have very limited funding. … I started with only one person.”

Now Gersava employs 17 full-time staff. He says as CEO his aim is not to become rich but to ensure much of what the company earns passes to its farmers.

Still, in addition to helping farmers, he’s been able to help pay college fees for his two nieces and support his siblings and parents, he said.

He says his work is far from done. By 2030, he aims for his company to have helped establish 1 billion bamboo plants and to have lifted 100,000 farmers out of poverty, especially in extremely poor areas such as his hometown and the province of Sulu.

Growing up in an impoverished family in Sultan Kudarat, he said, has given him a deep understanding of who pays the highest price as climate change impacts, from floods and droughts to heatwaves and storms, intensify.

“The wealthy CEOs and politicians are not the ones suffering the most from the consequences of climate change. It is the rural villager,” he said.

“It is the struggling farmers who are suffering from severe water shortages and droughts that will be the worst hit by food insecurity,” he predicted.

Also Read- No More Segregation on the Basis of Gender in Restaurants in Saudi Arabia

To battle both poverty and climate change, “we cannot continue with business as usual,” he said.

“We must continue to innovate, to protest and to hold government and companies’ feet to the fire,” he said in a speech at the conference. (VOA)