Having just returned to the United States from Belgium and China, Praveen Penmetsa, co-founder and CEO of Monarch Tractor, Livermore, California, had unique opportunities to hear how new U.S. tariffs are being received in areas important to U.S. trade.

Founded in 2018, Monarch Tractor's MK-V is the first commercially available, fully electric, driver-optional, smart tractor that combines electrification, automation, machine learning, and data analysis. The tractor is being newly marketed to dairies where the MK-V operates autonomously as a feed pusher.

Here are edited portions of the conversation Penmetsa had on Thursday with DTN/Progressive Farmer.

DTNPF: What are your impressions of the new tariffs?

Penmetsa: When the media talks about tariffs, they talk about it in terms of things like cars, consumer electronics, the things that we buy every day. I'm surprised by the fact that nobody's covering what the impact of these tariffs could be on farmers, farm equipment and global food trade. People forget that our food today is also part of a global supply chain, that there are customers for our production in other parts of the world. China buys a fair amount of our agriculture production. So, I feel like we are putting our food security at risk. And I don't think we're completely prepared for some of the implications of what this might mean. Our farmers need more support than ever before as they are being impacted both on their cost side as well as on the revenue side with these tariffs.

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DTNPF: What did you hear about the tariffs while in China?

Penmetsa: They're trying to understand what the longer-term situation is going to be. Is this just short term, or is it going to be for a few years, something that they need to plan for? They feel quite strongly about their competitive side. (China) feels like they have a cost advantage, and while the tariffs will provide protection (in the U.S.), it gives them opportunities. They believe that this will force them to be even more competitive on the cost side. (Monarch) has a fair number of suppliers there, and they're all basically saying, "We are going to go and find even more cost savings so that we can be competitive in spite of the tariffs."

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DTNPF: Do you think China might be willing to invest in the U.S.?

Penmetsa: They are talking about localized production; how does (China) partner with U.S. companies to bring the technology to the U.S. and maybe set up manufacturing (in the U.S.). This is a new discussion. But I think we have seen some of this before. During the '80s, there was similar consternation about what the Japanese were doing in the automotive industry. And the result of those pressures (was that Japan) came to America, manufacturing here. I think we'll start to see that with some of the Chinese companies. They're planning to see what they can do on the production side, state side, right here in the U.S.

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DTNPF: What about Europe? You were in Belgium. What were you hearing there?

Penmetsa: There is a different sentiment in Europe compared to China. China is very focused on markets and trade and what (tariffs) could mean for their industrial sector. I think Europe definitely feels it more as how does it affect national security and energy security. Europe is also trying to understand the dynamics. But I think there is also more focus on independence there, in the sense they want to make sure that they can stand on their own feet. There is definitely a lot of talk about things like defense spending, that this is a positive move which forces their countries to start taking control of their own defense.

Dan Miller can be reached at dan.miller@dtn.com

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