President Trump has issued a 25% tariff on steel and a 10% tariff on aluminum imported from the E.U., China, Canada and Mexico. These moves are expected to take a particularly heavy toll on the American farmer.
Tariffs are added fees that companies must pay to import specific goods from certain countries.
Melissa Harrington, sales director for Descartes Systems Group, a logistics and supply chain tech business based in Toronto, says the result of these increased tariffs will be higher prices for U.S. companies that import goods from the penalized countries. She shared with The Motley Fool which U.S. industries will be hit the hardest.
Harrington expects these moves will take a particularly heavy toll on the American farmer.
"Most U.S. agriculture is exported to Mexico, Canada and Southeast Asia," she wrote. "If we impose tariffs on these regions/nations, they are likely going to hit back with a tariff against our farming and agriculture exports, which would, in turn, cause them to import less of these products, hurting our domestic farming/agriculture industry."
"Tariffs have a 'trickle-down' effect,'" Harrington said. "This is not a cost the importer or corporation typically just absorbs; it's generally passed down to consumers. So as tariffs increase on your favorite items (or on the materials that go into that finished item), I'd expect to see that, over time, consumer prices would also increase."
So far, soybean farmers have been hit the worst, with an estimated loss of almost $625 million for just the soybean farmers in Iowa.