A trade war between the United States and China could have a dramatic impact on Illinois farmers.
The Trump administration is considering applying more tariffs against Beijing. White House Press Secretary Sarah Sanders said Friday that China has “engaged in illegal and unfair trade practices for many years.”
Earlier this week, the President announced new tariffs on $50 billion worth of Chinese goods imported into the U.S. Beijing responded with its own tariffs, of $50 billion on imported U.S. goods.
Those taxes wouldn’t go into effect until mid-May at the earliest, following a public hearing.
Even so, the possibility has farmers in Illinois worried.
Brent Pollard, who farms soybeans in rural Winnebago County, said, “We hope these tariffs don’t get implemented, but we don’t know how this is gonna go.”
Pollard says 60% of the Stateline’s soybean crop goes into the export market, with China being the number one importer. He says that, regardless of what they produce, 20% of the average American farmer’s income comes from agricultural exports.
“That’s a 20% cut off on your income,” Pollard said. “I don’t think any of us, regardless of what job we have in the U.S., could probably handle a 20% cut off what their income is. It’s just a very big concern we have for us.”
The Illinois Soybean Association says there are about 43,000 soybean farmers in Illinois. In a statement released on Wednesday, they say “the Chinese market is very valuable to us, as they purchase about 25% of our soybeans. That represents an estimated value of $1.7 billion in soybean exports from Illinois.”
The Winnebago-Boone Farm Bureau says farmers have seen a continuing decline in their income in the last five years. They say additional tariffs could further impact the economics of many Northern Illinois families.
“Agriculture is one of the biggest industries in this area, and exports are a very important and vital part of that,” explains Ann Marie Cain, Winnebago-Boone Farm Bureau Manager. “Without those export markets, it can drastically impact our agricultural industry.”
Pollard says he understands the Trump administration’s desire to fix unfair trade practices and the trade deficit, but doesn’t think the tariffs are the answer.
“We can negotiate between the American and Chinese sides on this,” he said. “So that we make sure all industries, all interested parties in the U.S., can get some benefit out in the end.”
China imposed new tariffs on pork imports this week. The country has been the second-largest buyer of U.S. pork by volume for the last 10 years.
The proposed tariffs jolted the global markets on Friday. The Dow Jones dropped more than 700 points at one time, ending the day about 570 points down.
Industrial stocks, like Illinois-based Caterpillar and Boeing, were among the Dow’s hardest hit. Shares of both companies declined more than 3%.