An ADM worker loads a barge container with grain on Thursday, Feb. 6, 2025, on the Illinois River at Spring Valley. (Scott Anderson)
Farmers and grocery shop owners in La Salle County are bracing for the impact the U.S. faces of a potential trade war from recently imposed federal tariffs.
On Feb. 1, the Trump administration announced plans to impose 25% tariffs on imports from Canada and Mexico, along with a 10% tariff on imports from China.
Hours after the announcement, Canada and Mexico ordered retaliatory tariffs on a variety of American goods, including many products shipped to U.S. farms.
Agriculture is one of La Salle County’s largest industries.
According to David Isermann, president of the La Salle County Farm Bureau, local farmers rely heavily on exports for their income, particularly grain, corn, soybeans and cattle, to markets across the globe.
More than 20% of U.S. farm income comes from exports, according to the American Farm Bureau Federation. In 2024, the U.S. exported more than $30 billion in agricultural products to Mexico, $29 billion to Canada and $26 billion to China.
While some of the tariffs on Canada and Mexico have been temporarily suspended, Isermann expressed concern about what might happen on local farms if the situation escalates.
Without a resolution, he said trade disruptions could increase production costs and reduce export opportunities.
“Canada and Mexico are our top two trading partners for most agricultural goods,” Isermann said. “If these tariffs were reinstated, it could hurt us both ways.”
Rick Pretzsch, economics professor at Illinois Valley Community College, said the 25% tariffs specifically targeting Canada and Mexico are a surprising situation, given the two countries history and importance as trade partners.
“This is a unique situation, specifically with the tariffs on our neighbors,” Pretzsch said. “Trump did impose tariffs in his first term, but Canada and Mexico were mostly exempt.”
Mexico is a key market for U.S. corn, while Canada is a vital source of potash, a fertilizer essential for farming, according to Isserman.
Isermann said the uncertainty surrounding the continuation of the tariffs has created a sense of unease among local farmers.
“We haven’t really seen the immediate impact of these new tariffs yet,” he said. “Right now, we’re in a period of wait and see but it’s definitely a nervous time, and we’re still hopeful things can stabilize.”
Isermann said the Illinois Farm Bureau and the American Farm Bureau Federation sent a statement to the Trump administration expressing their concerns.
He noted agriculture is often the first industry to be impacted negatively by retaliatory tariffs and trade wars, and both organizations were communicating these concerns to policymakers, including Illinois U.S. senators and house of representatives.
Pretzsch supported Isermann’s comments that agriculture is often hit hardest in trade wars.
“Agriculture is one of our major exports, so any time there’s a trade war, it’s affected. When other countries retaliate with tariffs like we could see now, agricultural products are usually the target,” Pretzsch said.
Mark Witek, owner and partner at Witek Wealth Management in La Salle, said while the tariffs could create some short-term market volatility, businesses and investors are cautious, waiting to see the final details of the tariff policy before making decisions.
“Until we know exactly what the tariffs will be, it’s hard to tell exactly what the effects will be,” Witek said.
Witek noted even without tariffs, local businesses tied to agriculture are already facing challenges with the market for fertilizers trending down.
“Fertilizer stocks are trading at all-time lows, and with high operational costs already squeezing farmers, it’s creating a tough situation,” Witek said. “A lot of that may already be priced into fertilizer stocks, but it’s still a challenging environment.”
Despite these concerns, Witek emphasized tariffs can at times be used as an economic tool to create leverage in markets, so it’s important that industries don’t overreact until everything is final.
“Sometimes tariffs are used as a negotiation tool, and certain issues are worked out before they actually take place,” he said.
Pretzsch said the potential goal behind the Trump administration’s tariff strategy.
“I believe the ultimate goal is to bring production back to the U.S.,” he said. “However, even if that goal is achieved, it won’t happen overnight — it will take time. And even then, it will likely drive up the prices of those products, even if they’re being produced here.
“The advantage of trading with Canada and Mexico is that, for one, the Canadian dollar is weaker than the U.S. dollar, making those products cheaper for us. Similarly, labor costs in Mexico are much lower, which also helps keep prices down.”
Both Pretzsch and Witek said until there is more clarity from policymakers, businesses are likely to remain in a holding pattern.
“A lot of businesses seem to be taking a wait-and-see approach, as any speculation at this early stage isn’t productive,” Witek said.
Colin Kuehl, political science professor at Northern Illinois University, said what’s good for politics can sometimes clash with business.
“Uncertainty is bad for business. This constant back and forth of ‘What’s he going to do?’ which I think it part of Trump’s political brand … in some ways can make him an affective politician, but it’s bad for business,” Kuehl said. ”It’s hard to make longterm business decisions when you don’t know your cost in a few months on a key supply you’re importing.”
Kuehl said it’s likely that increased tariffs, which he likened to a “regressive tax,” will have the biggest impact on the poorest people.
“The reason we’re buying these goods from China, Mexico and Canada is because they can produce them the most cheaply, the most efficiently. If we put this tax on them, they’re going to be more expensive,” Kuehl said. “A lot of companies around here rely on those imported goods like imported steel and aluminum to produce what they make, whether thats automobiles or beer or anything like that. So that makes it harder for them to compete and could have potential consequences on jobs.”
Local business owners like Tom McDonell, owner of Polancic’s Meats and Tenderloins in Ottawa, is taking a wait-and-see approach. He said agriculture is the backbone in the food industry, with rising produce prices already affecting his business.
“Anything that hurts agriculture or grocery stores is going to impact us,” McDonell said. “Inflation was already a problem for food, so I don’t think anybody wants to see the situation get worse.”
According to the U.S. Department of Labor, inflation rose 3% in January from the year before, primarily driven by higher grocery and gas prices.
McDonell specifically noted egg prices are currently “through the roof” and essential for many meat products made at his shop. That issue also is tied into the effect and response to the avian flu.
Much like local farmers, McDonell is waiting to see how the situation evolves before raising prices significantly or making any major future plans.
“I don’t want to raise prices too much because people are already struggling to spend money on food as it is,” he said.
With the tariffs being temporarily suspended, McDonell shares Witek’s hope that they are part of negotiations that could lead to a favorable market outcome.
“I’m hoping it’s more of a bluff and things stabilize at some point,” McDonell said. “For now, we might just have to weather the storm and hope for the best.”
The tariffs against Canada and Mexico are set to remain paused until March 4. Retaliatory tariffs and other measures also are on hold through that date.
As the deadline approaches, La Salle County farmers and business owners face continued uncertainty, awaiting clarity on how trade negotiations will turn out.
— Shaw Local News Network editor Kelsey Rettke contributed to this report.
Copyright © 2023 Shaw Local News Network
Copyright © 2023 Shaw Local News Network
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