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Alberta farmers making tough decisions about whether to buy new equipment because of U.S. tariffs

Farm equipment in southern Alberta on Aug. 17, 2018.
Farm equipment in southern Alberta on Aug. 17, 2018. Kyle Benning / Global News

A southern Alberta farmer is facing a dilemma following the steel and aluminum tariffs implemented by the U.S. government.

John McKee was hoping to buy new farming equipment this year that he believes will make his life much easier.

However, the new tariffs — 25 per cent on steel and 10 per cent on aluminum — compounded by a couple of warm summers are making him question any potential purchase.

“The weather this year is impacting this decision as well. This is our second year of a serious setback in yield because of the heat and the drought. So the ability to pay for this machinery comes into effect as well,” he said.

READ MORE: Steel tariffs make agriculture equipment unaffordable for some Sask. farmers

“This kind of came upon us right at the start of harvest and so we’re getting the crop in the bin first and we’ll deal with whatever happens after that.”

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The issue for Mckee was that he was quoted $100,000 for the unit he was looking at.  He believes a used one would save him at least $10,000 if not more. But parts to replace a broken, used machine are subject to tariffs.

READ MORE: Canadians may soon see grocery price hikes due to tariff spat, retailers warn

Although a new machine would fall under warranty, equipment retailers warn the tariffs could also raise those prices.

“If they do go up more, it might be better to go with a used one. But a lot of used machines, they are very difficult to find parts for. Some of them don’t make parts at all. So you have to build something yourself or get somebody to build something and that’s costly as well,” RPH Irrigation Service’s salesperson Steven Jones said.

There is no end in sight for the trade war with suggestions that Canada is being shut out of NAFTA talks.

READ MORE: Is Canada being shut out of NAFTA negotiations?

A University of Lethbridge political science professor noted both consumers and businesses suffer when countries battle over trade.

“When politics takes over from economic common sense, we all pay a price that we shouldn’t have to pay,” Geoffrey Hale said.

READ MORE: Ottawa preparing response if Donald Trump follows through with U.S. auto tariffs threat

Ottawa has said it is taking nothing off the table for its response to the U.S. on Thursday.

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Economic Development Minister Navdeep Bains said plan A is to encourage the Trump administration to back away from the tariffs.

-With files from The Canadian Press