President Trump announced last night he’ll impose 25-percent tariffs on Iowa’s two largest trading partners, Canada and Mexico. In a conference call this morning with Iowa reporters, Senator Chuck Grassley called himself a “free trader” and says Trump’s tactics are “questionable” but he’s willing to pause and see if they’re effective.
“I don’t believe in tariffs, but Trump has a new approach to tariffs,” Grassley says. “He believes you put tariffs on, you bring people to the negotiating table, and then you get freer trade as a result of it.”
Iowa businesses ship more products to Canada than anywhere else. Iowa exported $5.5-billion dollars’ worth of goods to Canada in 2023, which equated to 30-percent of the state’s total exports, while Mexico is Iowa’s second-largest trading partner. Grassley, a Republican, says he’ll take a wait-and-see approach to the president’s threatened tariffs.
“I think the tactic is questionable, but I’m not going to bad-mouth Trump’s approach,” Grassley says. “I’m going to sit and see how it works out. I hope he’s successful.”
The Tax Foundation, the world’s leading nonpartisan tax policy nonprofit, estimates the tariffs would reduce the nation’s GDP by four-tenths of one percent and cut employment by nearly 345,000 jobs. The foundation’s 2024 report says its estimates “do not capture the effects of retaliation, nor the additional harms that would stem from starting a global trade war.”
Grassley says Trump already has a track record with enacting tariffs during his first administration.
“We found that it did have an impact with China when he put the tariffs on,” Grassley says. “That was not a general tariff approach, so I think we’re seeing a different approach used by President Trump this time on tariffs, as opposed to other times.”
Grassley was asked -twice- how the threatened tariffs on Canada and Mexico would impact Iowa’s consumers, businesses and farmers, but he did not answer the question directly.
The Tax Foundation report says academic and governmental studies find tariffs under the Trump and Biden administrations have “raised prices and reduced output and employment, producing a net negative impact on the U.S. economy.”