Illinois farmers fear tariff and USAID fallout
Chinese retaliatory tariffs and a freeze on U.S. Agency for International Development programs are worrying the Illinois farm industry.
Why it matters: Chinese tariffs on farm machinery that kicked in this week could hurt sales for American companies including Caterpillar, which recently moved its headquarters to Texas but still has 12,000 employees in Peoria.
USAID's purchases of U.S. crops for foreign aid — which totaled $2 billion last year — have already stopped under President Trump's executive order, according to Reuters.
Context: Illinois exported $13.7 billion in agricultural goods in 2023, according to the Illinois Farm Bureau (IFB).
Bureau officials say they're still assessing the potential impact of the USAID freeze on Illinois farms.
What they're saying: "Our farmers simply cannot afford the uncertainty of a potential trade war," IFB president Brian Duncan said in a statement. "Farm income has declined for a second straight year, and we know from experience that farmers and rural communities are the first to suffer from retaliatory tariffs."
While China's tariffs on cars and liquid gas "will likely be limited" they "could have a larger impact on Illinois farmers and producers of agriculture equipment," Mark Denzler, president of the Illinois Manufacturers' Association tells Axios.
"We are committed to working in partnership with federal officials to find a solution that demands accountability while allowing for manufacturing growth in Illinois and across the United States."
Reality check: China has not yet extended tariffs to agricultural products as it did in 2018, crippling U.S. soybean exports, including from Illinois, the nation's top soybean producer.
The intrigue: U.S. counties that voted for Trump could be hurt most by China's retaliatory tariffs, per a new Brookings analysis.
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