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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.”

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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.”

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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

Robot Assisted Surgery is Linked to The Cost of The Equipment

Robotic assisted surgery has much better postoperative outcomes, but its widespread adoption depends a lot on the reduction in the cost of the equipment

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robotics, surgery, cost-effective, equipment
William Beaumont Army Medical Center performs the first robotic surgery in the Department of Defense using the latest robotic state-of-the-art robotic surgical system, a minimally-invasive robotic surgery system, at WBAMC, May 2. The surgeon-manipulated system allows for surgeons to operate with articulating instruments which bend and rotate far greater than the human wrist through an incision smaller than a centimetre. Wikimedia Commons

Robot assisted surgery has much better postoperative outcomes, but its widespread adoption depends a lot on the reduction in the cost of the equipment, say experts.

While the high cost of a robot, which may range between Rs 6-14 crore approximately, may prevent many hospitals from bringing these advanced technologies for the benefit of patients, training of doctors in carrying out these procedures is equally important.

The US based-Vattikuti Foundation has helped prepare 300 robotic surgeons in India since 2011 by bringing in nearly 150 internationally acclaimed experts in the area to hold master classes, performing and observing live robotic surgeries in eight specialities.

“India has over 300 trained robotic surgeons in eight specialities — gastrointestinal, urology, oncology, head and neck, thoracic, gynaecology, general surgery and bariatric,” Mahendra Bhandari, CEO, Vattikuti Foundation, told IANS.

“Patients in India are willingly opting for robotic surgeries for their treatments. Not only patients, young surgeons are leaving the old way (conventional surgeries) and they want to be a robotic orthopaedic surgeon now,” said Bhandari, while addressing orthopaedic surgeons at a master class on computer-assisted joint replacement surgery here on Saturday.

Mahak Baid, an orthopaedic surgeon from Kolkata said that even though robotic-assisted surgery is an advancement, the only thing that needs to be worked upon is cost-effectiveness.

“In a country like India, robotic surgery has to be economically viable. The robot itself costs a lot. So it is not just about the patients, it has to be economically feasible for the hospital as well,” he added.

However, the doctor said robotic surgeries will eventually grow in India.

“I have been using MAKO robots for the last two years and I’m extremely happy with the results. we’re able to do total hips, total knee and partial knee replacements. With robotics, we can do enhanced pre-planning much better than conventional methods,” Thadi Mohan from Amrita Institute of Medical Sciences, Kerala, told IANS.

“After the robotic surgeries, patients recover faster. Chances of revision become much less. Implants will last longer. There is also a change in the mindset of people as there are now a good number of trained surgeons,” he said.

robotics, surgery, cost-effective, equipment
The only thing holding back robotic-assisted surgeries in India are easy availability. It may take time but eventually it will become cheap and then more people will be able to use it. Wikimedia Commons

“The only thing holding back robotic-assisted surgeries in India are easy availability. It may take time but eventually it will become cheap and then more people will be able to use it,” he stressed.

Bhandari urged global medical devices and pharma firms to bring their technology to the Indian market expeditiously so that the Indian patients do not have to wait for decades to be able to access the most advanced technology, drugs and implants.

When asked about the future of robotics in India, Brian Davis, Professor of Medical Robotics at Imperial College London told IANS that it cannot grow overnight.

“Many of Indian orthopaedic surgeons have been overseas and trained in countries where high-tech systems are quite normal, so they come in and act as mentor for junior Indian surgeons. So, it’s gradually going to come about that you will have more and more experienced mentors but it’s going to take a while,” Davis added.

Many of the orthopaedic surgeons at the conference said that robotics-assisted bone replacement surgeries are far better and safer because of its consistency and precision than the conventional methods.

Joint replacement surgeons cited published studies that revealed that computer-assisted total knee arthroplasty leads to significantly lower blood loss, infections, inflammation and need for revision surgeries.

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“The cost is major factor and rightly so. It takes years to develop this kind of technologies. So by the time they come in practice, the machine costs a lot. Naturally robotic companies with huge investment want to recover their money and India and other developing countries are not their priamary market, Bhandari said.

“The Vattikuti Foundation tries to bring these technologies once they are established. Our model is that we want to exploit the high volumes of the patients in low margins in order to make it cost-effective. And cost should not be major consideration while using a technology, cost is bound to come down the moment the technology used by more and more people,” he said. (IANS)