Tariffs may dent tools for ranchers
Texas farm and ranch equipment dealers expressed mixed reactions to steep tariff increases on steel and aluminum imports.
Dealers exhibiting cattle chutes and horse trailers at the Houston Livestock Show and Rodeo on Friday said they were concerned about the tariff ’s impact on their bottom lines but also optimistic that increased U.S. steel jobs could buoy sales in the long run.
President Donald Trump will impose tariffs of 25 percent and 10 percent on imports of steel and aluminum, respectively, set to take effect in two weeks. The president has exempted Canada and Mexico for now, and left room for negotiations with other U.S. allies to avoid or lower the tariffs.
Nationally, the Association of Equipment Manufacturers issued a statement Friday expressing profound disappointment at Trump’s actions. Steel accounts for about 10 percent of equipment manufacturers’ direct costs, according to the group.
“These ‘Trump Tariffs’ will put U.S. equipment manufacturers at a competitive disadvantage, risk undoing the strides our economy has made due to tax reform, and ultimate-
ly pose a threat to American workers’ jobs,” AEM president Dennis Slater said in the statement.
McCoy Farm and Ranch Outfitters was informed by its manufacturers in early March, around the time when the tariffs were proposed, to expect a 6 percent increase in the cost of cattle equipment. For the San Marcos-based dealer, that means a $4,000 squeeze chute, a steel cage used to contain cattle to give them injections and other medical procedures, would cost about $4,300.
McCoy’s dealer Cliff Mulanax predicted that is not a big enough price increase to make a huge difference for farmers and ranchers in rural Texas.
“Price increases are part of life,” he said. “You can’t be upset by it.”
Still, McCoy’s is considering changing suppliers to those that use U.S. steel, Mulanax said. The company’s cattle chutes weigh about 1,200 pounds and are manufactured using steel from around the world, including China and shipwrecks from the bottom of the ocean, he said.
For Morgan Livestock Equipment, the new steel and aluminum tariffs likely won’t make a huge impact on sales, dealer Rusty Morgan said. That’s because the Bowie-based distributor sells equipment primarily from W-W Manufacturing Systems & Equipment, which uses exclusively U.S. steel, Morgan said. Its cattle chutes sell for $1,200 to $3,600.
“We haven’t had any notices yet,” Morgan said. “I don’t know if we’ll be impacted.”
Matt Murdoch, a trailer dealer based in Seguin, said he is bracing for higher prices, although he hasn’t yet been affected by the tariffs.
Murdoch sells utility and horse trailers priced from $4,000 to more than $100,000. An increase in steel and aluminum prices of 10 percent to 25 percent would be significant, as about 60 percent of his trailers are made from those metals, he said.
“I try to stay neutral, but I’m not the biggest cheerleader,” Murdoch said of the tariffs. “As a dealer, it’s going to hit me double because the suppliers are going to raise prices and the manufacturers are going to raise prices.”
Murdoch said higher prices caused by tariffs could slow sales. Murdoch’s dealership averages about 60 to 70 trailer sales a month. During the oil boom, sales had skyrocketed to 125 per month as oil field workers flush with cash rushed to buy trailers.
Dealers at the Houston rodeo expressed hope that protecting the domestic steel industry would yield more local jobs and steel production, which in turn could stabilize prices and bolster sales.
“If a bunch of steel mills reopen, it’ll create more jobs and help us,” Mulanax said. “It may be worth it in the long run.”