Tariffs Spread Pain Across Illinois Economy As Trade War Continues to Escalate

QUOTE FROM SEAN O’SCANNLAIN, PRESIDENT & CEO, FORTUNE FISH & GOURMET, CHICAGO, IL: “The trade war has created significant turmoil in the seafood industry, with tariffs causing price increases for the products we import and shutting off foreign markets for fishermen, lobstermen, and crabbers who make a living selling to international markets. Farmers, ranchers, manufacturers, and retailers across the country are faced with rising costs that lead to layoffs, while consumers are paying higher prices for everyday goods. Fair trade policies are important, but tariffs are hurting businesses and workers at a time when our economy could be expanding and creating more jobs.”

ILLINOIS BUSINESSES TESTIFY TO CONGRESS: TARIFFS DRIVE UP PRICES.

  • Homewerks Worldwide, Lake Bluff, Illinois: “…when we had this in wave one, we passed the price increase through and they raised the retail price. So, what this means is it will impact, likely impact, the lower-income customers buying our opening price point and commodity faucets and valves, and then they are most likely not to do a project.’ – Peter Berkman
  • Power Stop, Bedford Park, Illinois: “My point today is straightforward. The imposition of 25 percent tariffs on imports of brake rotors and brake pads will serve no role in accomplishing the objectives of Section 301 investigation but rather will simply harm individual auto owners who could least afford an unexpected expense and thereby quite possibly lead to more accidents, layoffs, and make roads less safe.” – Arvin Scott
  • Display Supply & Lighting, Itasca, Illinois: “A 25 percent ad valorem duty wipes out our gross profit margin. It would put us out of business.” – Rob Cohen (Gina Hebb, “Dozens of Retailers Testified About How Trump’s Trade War with China Could Impact Them – Here’s What They Said,” Markets Insider, 9/13/18)

TARIFFS LED ILLINOIS MANUFACTURER TO SHUT DOWN TWO FACTORIES AND MOVE TO MEXICO. “A storage safe manufacturer is reportedly planning to shut down two Illinois factories and move to Mexico in response to President Trump’s tariffs on Chinese metal imports. Stack-On Products will close its two Chicago-area plants in October and lay off 153 people, according to the Chicago Tribune.” (Avery Anapol, “Illinois Manufacturer Moving to Mexico Over Trump Tariffs,” The Hill, 8/15/18)

HOG FARMERS FACE OPERATING LOSSES THANKS TO TARIFFS. “Due to the increased supply of pork this year coupled with the tariffs placed on pork exports to Mexico and China, prices are expected to drop significantly. ‘They estimate that this will further decrease the price by about $9 per head,’ Doherty said. ‘So, we are already looking at some kind of a loss per head going into late 2018 and then into 2019. Basically, it’s making a bad situation worse.’” (“Excess Pork Supply, Tariffs Mean Losses for Illinois Pork Farmers,” WQAD8/6/18)

TRADE WAR THREATENS TO WIPE OUT ILLINOIS AGRICULTURE. “Brian Duncan, 53, a midsize corn, soybean and hog farmer with 4,000 acres in Polo, Illinois, already had been grappling with thinner profits. … If the tariffs remain, Duncan expects his sales over the next year to fall by $1.5 million in his hog business, about $400,000 in corn and $100,000 in soybeans. Duncan has 3,500 acres of corn and 500 acres of soybeans. And he raises 70,000 hogs a year that are sold to giant pork producers such as Tyson Foods and Smithfield Foods. ‘The trade war has swung me from a half-million-dollar profit to a half-million-dollar loss,’ the 35-year, third-generation farmer says.” (Paul Davidson, “Boat Maker, Farmer, Auto Parts CEO Feel the Pain of a Growing Trade War Under Trump,” USA Today, 8/27/18)

ILLINOIS’ FINANCIAL HEALTH COULD BE AFFECTED BY TRADE POLICIES. “U.S. states worried about a negative impact on their finances from escalating trade disputes instigated by President Donald Trump are beginning to caution bond investors. Washington and Illinois, two of last year’s top five export states by dollar value, for the first time warned about potential trade-related consequences in documents for recent bond sales.” (Karen Pierog, “Trump Trade War Prompts State Warnings to Bond Investors,” Reuters, 8/27/18)

ILLINOIS FARMERS NEED ‘TRADE, NOT AID.’ “The U.S. Department of Agriculture will also buy up to $1.2 billion in commodities targeted by the retaliatory tariffs, and will spend $200 million on developing foreign markets for American produce. That’s not enough, say some farmers. ‘As soybean producers head into harvest, we need access to markets from trade deals and a stable Farm Bill, not short-term aid packages,’ said Doug Schroeder, vice chairman of the Illinois Soybean Association, in a statement. ‘More U.S. soy gets exported to China than all other American agricultural products combined. Market access and trade certainty support our families, our businesses and our communities. Short-term aid does not create long-term market stability. Producers need trade, not aid.’” (David Meyer, “‘Trade, Not Aid:’ Farmers Are Pushing Back Against Trump’s $4.7 Billion Trade War Bailout,” Fortune, 8/28/18)

TRADE WAR WILL CAUSE ‘IRREPARABLE DAMAGE’ TO FARMERS. “‘Trump’s trade war will cause irreparable damage to the farm sector,’ commented Jim Goodman, president of the National Family Farm Coalition (NFFC). … Of course, tariffs and retaliations are affecting all sectors, from metals and motorcycles to beer and beans, but farming is especially vulnerable. Indeed, China’s response to Trump’s $34 billion in tariffs on Chinese goods has already lowered prices for soybeans 15 to 25 percent. Illinois is China’s 3rd biggest trading partner, the state is a top U.S. soybean producer, and much of Illinois’ soybeans are exported – often to China, a viable market for decades.” (Bill Knight, “Illinois Farmers, Consumers Hurt By White House Trade War,” Canton Daily Ledger, 8/23/18)