Tariff uncertainty rattles Iowa farmers, small businesses

Mark Moran
The Trump administration’s unstable tariff deadlines and looming trade deals have left Iowa farmers and small businesses feeling uncertain about their economic future.
Iowa is the nation’s second-largest exporter of agriculture. In 2023, U.S. Department of Agriculture data show the state shipped $13.5 billion worth of goods overseas, with pending tariffs threatening export stability.
Aaron Lehman, president of the Iowa Farmers Union, said the cost of levies will trickle down to farmers and other small business owners.
“That tariff raises the price for our product for buyers around the world,” Lehman pointed out. “Therefore, they’re less likely to buy from us and they’re more likely to buy from some farmer from another part of the world where there is less of a tariff.”
Lehman added the uncertainty is making it hard for Iowa farmers and small businesses relying on exports or imports to plan for the future.
Historically, tariffs have had long-term negative economic benefits for U.S. businesses, often causing global trade disputes. Lehman warned retaliatory tariffs affect all sectors of the agriculture industry.
“That will impact a local machinery dealer. It will impact a local input supplier for us that we’re less likely to buy from,” Lehman outlined. “Our local institutions we line up our credit with, our banks and other institutions.”
Lehman agreed a level economic playing field is important but emphasized it is just as necessary to protect domestic farmers and small businesses.

Iowa corn farmers stand to gain from tax breaks

Mark Moran
Despite the elimination of a handful of alternative energy tax incentives in the new federal budget, Iowa corn farmers will benefit from one that was extended.
Tax breaks and rebates encouraging investment in solar and wind power in Iowa were eliminated in the federal spending plan. However, the Trump administration extended an incentive enabling farmers in Iowa to produce more corn. The Hawkeye State is the nation’s top corn producer, much of which is used to produce ethanol.
Chris Bliley, senior vice president of regulatory affairs for the biofuel trade organization Growth Energy, said grain-based fuels burn cleaner and are more environmentally friendly.
“The credit actually goes for production of lower carbon fuels that are used for transportation,” Bliley explained. “It includes on-road fuels as well as sustainable aviation fuel. And so, the lower in carbon, the higher the credit.”
The Trump administration has made efforts to extract more fossil fuels, which it said will move the U.S. toward energy independence.
Lawmakers in Iowa and neighboring Midwest states have introduced their own tax incentives for biodegradable jet fuel, which Bliley noted will create economic benefits for ag producers.
“To remain competitive, plants in Iowa and Nebraska and throughout the Midwest are investing in some of these key projects to lower their carbon intensity,” Bliley observed.
The commercial airline industry is aiming for net-zero carbon emissions by 2050, according to the International Air Transport Association, which could continue to benefit Iowa farmers who provide corn for ethanol production.

Iowa solar industry threatened by tax incentive cuts

Mark Moran
Iowa is among the nation’s leaders in wind energy production, and the state is looking to follow suit with solar power.
But Congress has eliminated the tax incentives that help solar farmers grow the industry.
Iowa has worked with landowners to install wind turbines on thousands of acres of farmland, and has boosted its solar power-generating capacity from a scant two megawatts to nearly 350 in the last decade.
But the new federal budget rolls back the incentives that help farmers make these investments.
Sean Gallagher, senior vice president of policy with the Solar Energy Industries Association, said the change will have consequences for the renewable energy industry – not just in Iowa, but nationwide.
“It has really devastating impacts,” said Gallagher, “not just to the solar industry, but to American energy security and national security. Solar energy is putting more new power on the grid than every other fuel source combined in the last several years.”
Iowa’s 6,000 wind turbines create more than 12,000 megawatts of power, accounting for the largest source of energy production in the state.
While wind and solar power have proven successful in Iowa, the political landscape – both in Des Moines and Washington, D.C. – has become less supportive of giving tax breaks to help people make the investment.
Gallagher said the current local and national political climate appears to favor fossil fuels over non-traditional energy sources, despite the economic benefits of wind and solar power.
“Every dollar spent on clean energy tax credits has a $2.67 return,” said Gallagher, “in the form of lower energy costs for consumers, and taxes paid by clean energy infrastructure projects – mostly property taxes.”
Iowa and other states are now faced with the prospect of trying to invest in solar energy and other renewable power sources without federal encouragement to do so.