ShieldAg Becomes Subject of Hearing with U.S. Secretary of Commerce

An Association member company has become the face of an issue in the shortline industry: the impact of steel tariffs and trade uncertainties.

During a Senate Finance Committee in June, Sen. Pat Roberts (R, Kansas) told the story of Mike Bergmeier, president of ShieldAg. The company faces a potentially devastating increase in its steel costs if it is not granted an exclusion. It almost certainly qualifies for the exclusion, but the process has been painstaking.

Bergmeier reached out to industry leaders and lawmakers earlier this summer urging action. “Farmers and agricultural input providers have become the cannon fodder in this looming trade war with China, Canada, Mexico and other valued trade partners,” he wrote in the days before the first round of tariffs with China took effect.

He explained that ShieldAg, which manufactures tillage tools and hardware, imports a steel produced only in Canada. The import tariff will add $85,000 to the annual cost of production if an exclusion is not granted. (Since his letter and the Finance Committee hearing, ShieldAg’s petition for an exclusion has been published, which launched a comment period. When that closes August 14, a review begins and could last 90 days.)

At the time of the hearing, ShieldAg’s application for an exemption was one of 42,000 filed with the federal government. Roberts, who is chair of the Senate Agriculture Committee, referred to Bergmeier’s circumstances as “exclusion purgatory.”

Bergmeier also explained in his letter that Kansas relies heavily on agriculture manufacturing to sustain a supply chain that includes dealers and farmers who are part of a worldwide network.

“These manufacturers are proud to build and export products to dozens of countries,” he wrote, “and use many of those same countries to source valuable inputs for their products in a true trade partnership.”

He went on to say the import tariffs “will have a direct and negative impact on agriculture.”

Roberts said the challenge facing Bergmeier is the “classic example” of how rural America is affected by trade politics.

“I think the case can be made that these businesses are paying the price for the administration’s negotiating strategy,” Roberts said at the hearing. “(Commerce) Secretary (Wilbur) Ross, I think it is imperative that you and your department understand the current impact not only with regards to farmers and ranchers and the entire ag industry but also the entire business community, the so-called little guy.”

Ross promised during the Finance Committee he would reach out to Bergmeier, and he did. Bergmeier said Monday he believes Congress is working hard on the issue. In the meantime, he is handling the uncertainty as best he can. He has been paying the 25 percent tariff on imported steel since July 6.
 

Roberts also discusses Bergmeier’s story on his Senate web page.