NEWBERRY, SC (WIS) - Farmers across the Midlands are becoming increasingly concerned after President Trump's announcement regarding new tariffs on aluminum and steel.
Trump plans to impose a 25-percent tariff on imported steel and a 10-percent tariff on imported aluminum. Tariffs are designed to protect domestic industries and raise revenues, but local farmers worry over possible retaliation.
John Long runs his family's 1,400-acre farm in Newberry. In addition to other crops, Long harvests around 700 acres of soybeans each year, which amounts to between 30 and 40 percent of his annual profits.
The USDA net farm income forecast for 2018 is $59.5 billion, marking the lowest level since 2006. However, since 2006, Chinese global soybean imports have increased three-fold from less than 1.075 billion bushels to an expected 97 million metric tons this year.
According to Long, more than half of the United States' soybean exports go to China. Retaliation from the country due to tariffs in the aluminum and steel industry could wreak havoc on his business.
"I'm somewhere between very concerned and scared to death," Long said. "The biggest fear factor is the unknown and we're just hopeful some our legislators in Congress can prevent this from becoming disastrous for the agriculture industry and in particular soybeans."
Long believes if China begins exploring different options when it comes to soybean producers, U.S. farmers could be in for a world of hurt.
"Our profit margins on soybeans, in general, are very thin," Long said. "Even if we started planting something else because we couldn't get a good price for soybeans, soon enough other farmers would do the same and then you'll have yet another product that there is too much of and not a good price on."
The tariff on aluminum and steel is also worrisome when it comes to the machinery farmers like Long use to harvest their crops.
"If those prices go up, that'll be passed on to us as well so we'll be paying more for already expensive machinery needed to do our work," he said. "It's just a bad deal all around."
The glut of one crop tends to lower prices for others, according to Long. As a result, consumers could see prices go up at the grocery store.
"They may not see it immediately, but it could happen with time," he said.
Beyond agriculture concerns in the Midlands, manufacturing in the Upstate is of growing concern. Tariffs on aluminum and steel would likely increase the price of products created by companies like BMW, which employs 9,000 people at its Spartanburg plant. It is the state's largest manufacturer by employment.
Statewide, manufacturing makes up 30 percent of jobs in South Carolina.
In 2002, President George W. Bush looked to impose an 8 to 30 percent temporary tariff that was originally scheduled to be in effect until 2005. The Bush administration said they were imposed to give U.S. steelmakers protection. However, a report from the U.S. International Trade Commission found the result of the tariffs was a $40 million hit to the economy.
An estimate by the Peterson Institute for International Economics found it cost around $400,000 per job saved in the steel industry under that temporary tariff.