In a campaign opposing President Trump's trade policies, the U.S. Chamber of Commerce released a report Monday showing more than $977 million in Iowa exports are threatened by new tariffs.
The nation's largest business group released a state-by-state analysis, arguing the administration's new tariffs, plus those threatened by trading countries, could spark a global trade war. In the report, the Chamber argues retaliatory tariffs, recently announced by Canada, Mexico and others, will make American-made goods more expensive, resulting in lost sales and jobs.
Trump has implemented billions of dollars in tariffs targeted at China, Canada, Mexico and the European Union. Last week, Canada retaliated on steel and aluminum tariffs, vowing to impose tariffs on $12.6 billion worth of American goods. China is expected to impose a new 25-percent tax on soybeans in July. Mexico is adding retaliatory tariffs to pork imports, according to a report by Reuters.
"Over the course of the week, we will see a lot of action on either the imposition of tariffs or the delay of that," Agriculture Economist Chad Hart, with Iowa State University, said. "We've already seen Canada move over the weekend and put in their tariffs. The EU could move later this week. And we could see moves by Mexico, by ourselves and by China. So you're seeing a lot of trade barriers being erected this week and the damage being done will depend on the product."
In Iowa, the Chamber report shows 456,300 jobs are supported by trade. The state will be the hardest hit by nearly $660 million in exports to Canada threatened by new tariffs, including herbicides, steel and aluminum.
More than $104 million worth of exports to China are threatened, including more than $30 million in soybeans. And the report shows more than $125 million in pork exports to Mexico are now at risk.
Hart said the country is keeping a close eye on Iowa, with its especially large agriculture economy. And so far, he said the state is seeing two impacts: a potential loss in value and an immediate loss of incomes.
"So an example is soybeans versus pork,” he said. “With soybeans, we've seen a loss in the potential value but haven't seen damage to incomes yet because not a lot of soybeans are being sold this time of year. With pork, we see a drop in actual income because the sales period is throughout the entire year."
While the Trump administration argues the tariffs are necessary to offset trade imbalances, several other groups have been fighting against the trade policies, fearing significant damage to the economy.
"Whether you're on the strong side or the weak side of the trade war, it tends to hurt both sides due to a loss of jobs in certain sectors and a slowdown in the economy," Hart said. "Iowa is probably bearing more of a burden from the trade dispute because ag has gotten wrapped into this so quickly."
If the trade dispute continues into the fall, Hart predicts a decline in farm income and jobs, as well as a drop in processing jobs related to agriculture. He said bigger manufacturers, such as Deere & Co., will likely feel the impacts of a slower agriculture economy.
"When it comes to ag, Iowa produces a tremendous amount of surplus compared to what we use in the state," Hart said. "We're built for an exports market. When those exports are shrinking, that tends to mean our economy is shrinking."