President Donald Trump’s recent decision to impose tariffs on imports from Canada and Mexico, effective February 1, 2025, has left Iowa’s business owners and farmers bracing for potential impacts.

These tariffs are expected to affect various sectors, notably the automotive and agricultural industries.

Impact on Auto and Repair Shops

Canada and Mexico are significant suppliers of vehicles and car parts to the United States. With Canada planning to retaliate against these tariffs, auto and repair shops in Iowa anticipate challenges. Moutassim Meri, owner of Mo’s Auto Shop in Des Moines, expressed concerns about the potential repercussions. He noted that imposing tariffs could lead to retaliatory actions, resulting in increased prices for parts, ultimately affecting consumers.

Meri expects conditions similar to those experienced during the COVID-19 pandemic, where parts availability was low, and prices were high. To mitigate these effects, he is exploring alternatives like online ordering, though this approach presents its own set of challenges, including longer wait times and potential warranty issues. In the auto repair industry, timely service is crucial, and delays can significantly impact customer satisfaction.

Concerns Among Iowa Farmers

Iowa’s farmers are also apprehensive about the impending tariffs. Aaron Lehman, president of the Iowa Farmers Union, highlighted that the state’s leading industry is poised to face significant challenges. He pointed out that farming profits are already low, with commodity prices below the cost of production, leading many farmers to incur losses in the past year. Lehman emphasized that tariffs typically lead to retaliatory measures, often targeting agricultural products. Given that Iowa is a major producer of commodities like corn and soybeans, the state’s farmers could be among the first to feel the impact. Additionally, many inputs that farmers rely on are imported, meaning the tariffs could increase their operational costs on multiple fronts.

Political and Economic Reactions

The broader economic implications of these tariffs have sparked concern among some Republican members of Congress. They worry about the potential negative effects on their home states’ economies, particularly in sectors heavily reliant on trade with Canada and Mexico. For instance, Senator Chuck Grassley of Iowa has expressed apprehension about the impact on agriculture, a vital component of his state’s economy. Economists also warn that these tariffs could raise inflation, slow economic growth, and harm American consumers and workers. They caution that such measures might lead to retaliation from other countries, further complicating economic conditions.

Historical Context and Future Outlook

This isn’t the first time Iowa’s agricultural sector has faced challenges due to trade policies. During the U.S.-China trade war, Iowa farmers were significantly affected, particularly soybean producers. The subsequent phase one trade deal with China and the ratification of the United States-Mexico-Canada Agreement (USMCA) provided some relief, opening new markets for American agricultural products. However, the current tariffs threaten to disrupt these gains. Lehman emphasized the importance of educating policymakers about the potential impacts on farmers and rural communities. He also highlighted past instances where relief measures were unevenly distributed, often favoring larger operations, and stressed the need for fair support for small and medium-sized farmers if adverse effects materialize.

Conclusion

As the February 1 deadline approaches, Iowa’s businesses and farmers remain vigilant, preparing for the anticipated challenges. While the full extent of the tariffs’ impact remains uncertain, both sectors are proactively seeking strategies to navigate the potential economic hurdles ahead.