Tariffs announced by President Donald Trump and the possibility of a trade war have raised alarms for agriculture industries in Illinois and across the U.S.
The state is the nation鈥檚 second-leading exporter of both soybeans and feed grains and related products, said the Illinois Department of Agriculture. About 44% of grain produced in Illinois is sold for export.
The U.S. is the world鈥檚 largest food exporter. Illinois ranks fifth in the country for agricultural product exports, with $10.6 billion, according to the Illinois Agriculture Department. Overall, marketing of the state鈥檚 agricultural products generates more than $51.1 billion annually. Crops account for 40% of that total.
The Illinois Farm Bureau is concerned about harm to the state鈥檚 farmers from potential tariffs on the United States鈥� top three agricultural trading partners: Mexico, Canada and China. The three countries, as well as others, have warned they will impose retaliatory tariffs on the U.S. in response to Trump鈥檚 orders.
鈥淥ur farmers simply cannot afford the uncertainty of a potential trade war. Farm income has declined for a second straight year,鈥� Brian Duncan, Illinois Farm Bureau president, said in a statement last week. 鈥淯ncertainty surrounding tariffs and the potential for retaliation makes it difficult to plan for the future.鈥�
Zippy Duvall, president of the American Farm Bureau Federation in Washington, D.C., said earlier this month: 鈥淭ariffs and tariff retaliation often hit farmers and ranchers hard, which make it more difficult for them to pay their bills and grow the food America鈥檚 families rely on.鈥�
Consistency is key
Evan Hultine is a sixth-generation farmer near Princeton, in Bureau County, more than two hours west of Chicago. He grows corn, soybeans and seed corn with his parents on a 1,300-acre farm.
鈥淔armers always face a lot of uncertainty. We expect it from the weather, but we really need consistent trade approaches. Consistency is really key,鈥� Hultine said.
Farmers can spend decades building up trade partners and agreements that are threatened by tariffs and trade wars. 鈥淚t鈥檚 hard to get new partners to work with you if you have constantly fluctuating trade positions,鈥� he said.
Hultine isn鈥檛 certain of the exact destination of his crops because he sells to grain merchandisers who distribute to various markets. But he said much of it is exported, such as soybeans to Europe and corn that鈥檚 turned into ethanol and ends up in Canada.
Rural economies would be hit hard by retaliatory tariffs, Hultine said. 鈥淭he stress to the whole system is something we鈥檙e hoping to avoid.鈥�
Trump鈥檚 tariffs
Last week, Trump ordered an additional 10% tariff on Chinese imports. In addition, he has readied tariffs on Canada and Mexico that could take effect in early March, after being suspended for 30 days. On Monday, he also removed the exemptions from his 2018 steel and aluminum tariffs, meaning all steel imports will be taxed at a minimum of 25%. Trump also hiked his 2018 aluminum tariffs to 25% from 10%.
Canada and Mexico both have announced they would impose retaliatory measures. Other countries would likely follow. On Friday, the European Union鈥檚 executive branch vowed to 鈥渢ake firm and immediate action鈥� against Trump鈥檚 tariffs on steel and aluminum.
Between 2018 and 2019, tariffs resulted in approximately $27 billion in lost exports for U.S. agricultural producers, according to a U.S. Department of Agriculture report. Soy and pork producers suffered the most significant economic damage.
In 2018, the U.S. imposed tariffs on steel and aluminum imports from major trading partners, as well as on a broad range of imports from China. In response, Canada, China, the European Union, India, Mexico and Turkey responded with retaliatory tariffs on a range of U.S. agricultural exports, said the USDA.
鈥淲e know from experience that farmers and rural communities will bear the brunt of retaliation,鈥� Duvall, of the American Farm Bureau Federation, said earlier this month. 鈥淗armful effects of retaliation to farmers ripple through the rest of the rural economy.鈥�
In addition to crops, agricultural inputs and equipment are affected by tariffs. More than 80% of the United States鈥� supply of potash 鈥� a key fertilizer ingredient 鈥� comes from Canada, according to the American Farm Bureau.
鈥淭ariffs that increase fertilizer prices threaten to deliver another blow to the finances of farm families already grappling with inflation and high supply costs,鈥� Duvall said.
Contributing: AP
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