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Summary
In this analysis, researchers affiliated with the Iowa State University Center for Agricultural and Rural Development use historical trade patterns, elasticities, and revenue linkages to discern the potential 2025 tariffs’ near-term impacts on the state of Iowa. We use partial-equilibrium modeling approaches that do not directly consider linkages among the markets and industries across the state of Iowa. The partial equilibrium techniques look specifically at the corn, soybean, hog, and ethanol markets along with industry, household, and government revenue impacts from changes in these markets. While there is a great deal of uncertainty about the duration of the trade disruptions and the impact these disruptions might have to long-held trade equilibria, the main results of the study are as follows.
• We examine three hypothetical tariff retaliations by trading nations. In this report, we assume all nations respond in-kind to US tariffs. We recognize that countries may not respond at all, however, at the date of this report, we are merely assessing possibilities.
o Base10 Scenario: a global 10% tariff, with exceptions for Canada and Mexico;
o Reciprocal Scenario: Base10 with the additional reciprocal tariffs announced between April 2, 2025 and July 11, 2025; and,
o BRICS Scenario: Reciprocal scenario with additional tariff announcements for BRICS countries.
• Overall losses to Iowa’s Soybean industry of $191 million in the Base10 Scenario to $1.49 billion in the BRICS Scenario; Iowa soybeans are a $5.8 billion industry.
• Overall losses to Iowa’s Corn industry of $126 (Base10) to $528 million (BRICS); Iowa corn is an $11.7 billion industry.
• Overall losses to Iowa’s Hog industry of $200 million (Base10) to $1.18 billion (BRICS); Iowa hog production is a $7.3 billion industry.
• Overall losses to Iowa’s Ethanol industry of $40 (Base10) to $168 million (BRICS); Iowa ethanol is a $7.4 billion industry.
• Revenue losses in these industries translate into additional lost revenues in other industries and lost income, as well as impact the value added (GDP) of the state of Iowa. The ranges in this report reflect total output (revenue) losses to Iowa businesses from $813 million in the Base10 scenario to $4.9 billion in the BRICS scenario. Lost household income ranges from $164 million to $1 billion depending on the scenario. Value added (GDP) is reduced by $396 million in the Base10 scenario to $2.46 billion in the BRICS scenario.
• Tax revenue losses (local, state and federal) range from $56 million to $348 million depending on the scenario. The State of Iowa itself loses from $12 million to $76 million in tax receipts.