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Iowa farmers are uneasy with trade wars as export tariff threats mount

Heartland farmers are especially concerned over negotiations with Mexico and Canada.

DECORAH, Iowa — Facing the potential of a loss in profits and closed foreign markets amid a U.S.-ignited trade war, farmers here are expressing anxiety about President Donald Trump’s negotiations with a growing number of foreign nations.

“If we lose the export markets, it will hurt us from an economic standpoint. It will hurt the ability to provide for our family, and it will hurt the state and the nation as it will hurt our economy eventually,” Bob Hemesath, a fourth-generation pork producer and corn farmer here in northern Iowa, told NBC News. “Agriculture is one of the biggest industries in Iowa. It supports a lot of jobs. If agriculture suffers, small-town main street suffers.”

After Trump in March announced a 25 percent tariff on steel imports and 10 percent tariff on aluminum imports from China, pork producers in the U.S. were hit with a retaliatory 25 percent tariff on their China-bound exports. The Mexican government, after Trump’s decision Friday to levy the same metal tariffs on the U.S.’s southern neighbor, as well as Canada and the European Union, threatened to add its own tariffs on U.S. pork.

In the two months since the Chinese tariffs were implemented, agribusiness economist Dr. Dermot Hayes estimates Iowa’s pork producers lost about $560 million in profits. And the pork futures market immediately reacted negatively to the possibility of Mexican tariffs after Friday’s announcement.

The developments have frustrated farmers like Dave Struthers, a pork producer in Collins, Iowa, who voted for Trump in 2016 but defended Mexico and Canada as trading partners to the U.S. More than 25 percent of Iowa pork is exported to foreign markets, including 10 percent of the total output heading directly to Mexico.

“They've been excellent. Mexico for years has been No. 1 in volume, and No. 2 in value, and Canada is our No. 4 trading partner,” Struthers said from the kickoff of the World Pork Expo in Des Moines on Sunday. “They're crucial to us. When it comes to pork producers, Canada and Mexico have been very good.”

But Bruce Rastetter, a major Republican donor and owner of one of the state’s major farm operations, urged Iowa farmers to give Trump a shot to continue pursuing his trade agreement negotiations to improve the deal for other goods, like dairy and steel.

“I think [the pork producers] just need to take a deep breath for a moment, let constructive tension happen with these trade agreements, and it’ll all work out fine,” said Rastetter, who farms 14,000 acres of soybean and corn crops and oversees facilities where 700,000 pigs are raised annually to sell for pork production. “There are other issues that need to be resolved so their trade is sustainable, alongside other agricultural products across the country.”

Ethan Wise, a third-generation dairy farmer in Hesper, Iowa, said his family works in one of those industries that needs an expanded market, noting the surplus of milk in the U.S. "It’s been tough for the dairy market. I think in the long run — I wish I had a crystal ball to see how it plays out — but I would be more an advocate of everyone taking a deep breath," Wise said. "It’s not all bad. It’s just making people uncomfortable."

Trump tweeted on Monday that “Mexico, Canada, China and others have treated [farmers] unfairly.”

Farmers in Iowa recall the farming crisis in the early 1980s when grain exports to the Soviet Union were cut off by President Jimmy Carter's administration and subsequent economic strains on the agricultural market led to mass closings of family farms across the Midwest. The potential consequences with looming export tariffs worry local farmers, like Trent Thiele, a pig farmer in Elma, that the outcome could be reminiscent of the crisis.

“For our local community, it would basically stop growth all around. In our community, it's not just the pork producer that relies on the money coming out of the pig,” Thiele said. “When you build a barn, we have the cement contractor, the people building the barns, the electricians, maintenance on the roads: everything. They're all relying on some of that money out of that pig. Without that, those people working would be out of a job."

In response to Trump’s levying of the metal tariffs on U.S. allies on Friday, Canada threatened to respond by imposing its own tariffs on U.S. goods, including metal and whiskey, that would total $12.8 billion, the Canadian government asserted.

“The idea that we are somehow a national security threat to the United States is quite frankly insulting and unacceptable,” Canadian Prime Minister Justin Trudeau said in an interview on NBC’s "Meet the Press" over the weekend.

Trump will meet with Trudeau and other U.S.-allied nations at the G7 summit this week in Quebec City. Last week, the six other nations delivered a forceful rebuke of the Trump administration’s metal tariffs, directing U.S. Treasury Secretary Steve Mnuchin to convey the group’s “unanimous concern and disappointment.”