As steel and aluminum tariffs continue to loom in Canada from the United States, many in the ag industry wonder how the high prices will impact the cost of machinery in the future.
President of Hi-Tec Profiles, Trent Meyer, says the cost of steel was already on the rise prior to President Donald Trump imposing the tariffs, as steel supplies were starting to become limited due to high demand.
“We didn’t see one industry moving more than the other, ag was healthy, but construction was trying to come back, along with mining work, and really it was a little bit of growth everywhere that created a decent spike in demand starting around October/November of last year,” Meyer says.
When the U.S. added steel tariffs, Meyer says it caused panic throughout, as companies were already hurting to keep up with the steel shortage they were facing that came along with the increase in demand. With the added tariffs, most expected even more of a shortage as supply chains started to become disrupted.
The shortage of speciality steel —which comes in mainly from the U.S. — can potentially have an even greater impact on Canadian steel companies, as it’s heavily used in farm equipment. This could be harmful as it could limit the amount of production that could eventually result in job loss.
“Generally the idea is when you put a tariff on, is to make production more lucrative for your domestic providers — but in the case of steel, it hasn’t,” he says. “It’s just made prices go up, it hasn’t allowed people to buy U.S. steel for less.”
Meyer says right now the tariff is absolutely having an effect on the price which most companies are simply having to eat the cost; however, he adds if the tariffs don’t drop soon, the price of steel will skyrocket.