(Radio Iowa) – The top Republican in the Iowa House says state budget plans will weather the turbulence of President Trump’s latest round of tariffs, while Democrats say the legislature needs to react to the economic warning signs. House Speaker Pat Grassley says Republicans will continue to budget conservatively and he points to the six BILLION dollars the State of Iowa has in its Taxpayer Relief Fund, cash reserve and Economic Emergency Fund. “We’ve always talked about for unforeseen things, like potentially what the short term impacts of this may be, that’s why we’ve budgeted the way we have over the last several years,” Grassley said, “so I think we’re in a position to absorb any uncertainty that may come from that.”

Senate Democratic Leader Janice Weiner of Iowa City says there were warning bells in Iowa’s economy well before Trump’s tariffs were announced. “In 2024, Iowa was one of just two states where real GDP contracted and 47 states saw higher personal income growth than Iowa,” Weiner said. “…Washington and Trump are not helping Iowans with their extreme tariffs that are a tax on working Iowans.” House Democratic Leader Jennifer Konfrst says the legislature must prepare for an economic downturn — and for starters cancel next year’s expansion of state-funded savings accounts for private school expenses. “We have to be realistic about the impact of the chaotic tariff policy that’s happening in Washington right now,” Konfrst said.

Senate President Amy Sinclair, a Republican from Allerton, says legislators need to be as conservative as possible when developing next year’s state budget because there’s no way of knowing how the tariffs may impact state tax revenues. “Far be it for me to speak for President Trump,” Sinclair said. “Of course, I think the legislature needs to be mindful in our budgeting and the work that we do…I think all Iowans to take care of what we know and what we don’t know and try and plan for those contingencies.” Sinclair says the state is likely to see an increase in sales taxes paid on vehicle purchases, because sticker prices are going up — but Sinclair says agriculture is the state’s dominant industry and commodity prices are down already as trade war fears grip the markets. “I think we need to cautious in our spending based on that,” Sinclair said. “I think we have to be as conservative as possible.”

House Speaker Pat Grassley (R-New Hartford) speaking at a news conference on April 3, 2025. (RI photo)

Speaker Grassley says Trump’s tariffs are likely — in the long term — lead to trade agreements that expand markets for Iowa farmers. “We grow a significant amount of corn obviously here in this state, but all across this country…We grow more product than we’re able to use right here at home and so we have to be able to have some good, strong trade partners,” Grassley said, “so we’re hopeful the long term impacts of that will outweigh any potential short term, potential bumps in the road.”

Late Thursday, Trump said he’s open to re-negotiating tariffs with countries that make what he considers a “phenomenal” counter offer.