Minn. Counties Try To Get Ahead Of Potential Price Hikes Due To Tariffs

MINNEAPOLIS (WCCO) -- Businesses across the country are trying to predict how tariffs could affect day-to-day operations. And they aren't the only ones.

Some counties are trying to get ahead of any potential price hikes due to steel and aluminum tariffs.

There are 300 miles of gravel roads in Blue Earth County. To keep them clear, heavy equipment is needed for snow in the winter and gravel in the summer.

But unknowns when it comes to steel and aluminum prices, means there is an acceleration on big iron purchases.

"They are anticipating that the prices will be going up 5 to 10 percent due to numerous factors," said Ryan Thilges, public works director for Blue Earth County.

Dealers like Caterpillar and John Deere are letting counties know that the state contract for buying motor graders is expiring at the end of this month.

Due to inflation, emission standards, and new tariffs on steel and aluminum, a 5 to 10 percent price increase is expected next year.

"It's a considerable increase. It's more than you would anticipate for inflation alone, typically," Thilges said.

That's why Thilges said his department is buying a new grader now, instead of waiting. A heavy equipment purchase that could cost up to $250,000.

Thilges said buying now will save the county about $25,000.

"That's real money. That could be another piece of equipment we could use to update our fleet," Thilges said. "I know there are a couple of other counties within our district that are going the same route. Ordering their motor graders prior to that contract expiring. So we are just looking to capitalize on the current pricing and make the best decisions and best use of the public resources that we have."

Blue Earth County is also looking to buy a tractor backhoe before the contract for that piece of equipment expires.