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, Richard Dix, a Kinze senior director, says increased costs are negatively impacting smaller manufacturing companies like Kinze and other farm equipment manufacturers.
“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.
That means many are less likely to purchase the products Kinze makes.