Report: Iowa economy could see $2B loss because of tariffs
AMES, Iowa — Iowa's overall economy could see a $2 billion loss because of the ongoing trade disputes, a new report from Iowa State University researchers shows.
“The impacts to the state of Iowa are large, and largest in the agricultural sector," said John Crespi, professor of economics at the Iowa's land grant university and interim director of the school's Center for Agricultural and Rural Development, which published the study showing Iowa's gross state product could see losses ranging from $1 billion to 2 billion.
"This [report] is saying if nothing else changed, this is what it would do for our economy," Crespi continued, noting factors have already changed since the report's publishing Tuesday like a new round of tariffs and the governor's office announcement that the state has a $127 million surplus after closing the books for fiscal year 2018.
"What we have a harder time doing is saying what will the world will look like a year, two, three years or 10 years from now if tariffs stay in effect," Crespi said.
The report indicates that Iowa's exports like corn, ethanol, hog and soybean industries make up 7% of of Iowa's $190 billion economy.
Here is a breakdown of losses to major industries:
- Soybeans: $159 to $891 million
- Corn: $90 to $579 million
- Pork/Hog: $558 to $955 million
- Ethanol: a 2% drop in price for ethanol means a $105 million loss
Farmers are already feeling pain as a result of these disputes, according to Kirk Leeds, CEO of the Iowa Soybean Association. which represents a consortium of soybean farmers across the state.
“These are not future challenges. Soybean shipments to China today are virtually ended," Leeds said.
As the disputes continue, Leed says farmers are looking for bright spots in the uncertainty that clouds the future.
"The good news is, if there’s any good news , US soybeans are at a discount on the world market so we’re getting into some markets that we haven’t gotten into for a long time.”
