Politics
How Trump’s Tariff Plans Could Impact Consumers and Industries in Illinois
President-elect Donald Trump’s proposed tariffs are set to take effect on his first day in office through executive order, and they’re already drawing concern from economists about global and local impacts. The plan calls for a 25% tariff on goods from Canada and Mexico and a 10% tax on Chinese imports, a move Trump claims will create jobs, reduce the federal deficit and lower food prices.
However, experts like Jonathan Coppess, associate professor of agricultural policy at the University of Illinois Urbana-Champaign, caution that the reality is far more complicated and the tariffs could have a harmful effect on the American economy and consumers.
“Tariffs are a tax on imports into this country. A rough example is a sales tax, so everything that comes into this country is going to be hit with whatever that tariff is at the border,” said Coppess. He noted that while tariffs can be narrowly tailored, Trump’s sweeping proposal appears more like a blunt instrument.
Tariff policies are typically set by Congress, but in the former president’s previous term he used a national security exemption to existing tariff policies that Congress enacted — which may be the same route Trump takes to move forward with his economic policies during this term.
Illinois’ significant agricultural exports, like soybeans, could be hit hard by the consequences of Trump’s tariff plan.
“Back in 2018 when he first initiated tariffs in his first term, China began retaliating against soybeans as one of their targets,” Coppess said. “Then the question is: Do things escalate into a much broader and deeper conflict to something like a trade war?”
Chicago residents could also feel the squeeze. Higher import taxes often lead to price increases for consumers and disruptions in supply chains. Coppess warned that this could drive up inflation and sticker prices at the grocery store rather than create the economic growth Trump envisions.
