Illinois farmers will get a much-needed lift from two international trade agreements approved by the federal government this week, but experts are uncertain if their situations will improve in the long term.
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SPRINGFIELD – Illinois farmers will get a much-needed lift from two international trade agreements approved by the federal government this week, but experts are uncertain if their situations will improve in the long term.
After exchanging hundreds of billions of dollars of tariffs for more than a year, the U.S. and Chinese governments agreed to the first part of trade deal on Wednesday.
On Thursday, Congress passed the United States-Mexico-Canada Agreement, better known as USMCA, sending it to President Donald Trump to sign.
The average Illinoisan will likely not be much affected by the deals, experts say. Instead, the largest beneficiaries will be corn and soybean farmers who have been caught in President Trump’s trade conflicts with China and Mexico since 2018.
A cautious step forward
Illinois farmers have been especially hurt by China’s retaliatory tariffs in the ongoing U.S.-China trade war, forcing the federal government to issue $28 billion in aid nationwide.
Wednesday’s trade agreement with China, however, is more of a ceasefire than a peace agreement, said Jonathan Coppess, director of the Gardner Agriculture Policy Program at the University of Illinois at Urbana-Champaign.
“Really what it does is kind of stop the damage that was initiated with this tariff conflict that that the president started,” he said.
The deal should play out in two phases. Phase One, which began Wednesday, requires China to purchase $200 billion in U.S. goods over the next two years, including $32 billion of agricultural products.
Chief among them are soybeans and pork, in which Illinois ranks first and fourth, respectively, in U.S. production.
American soybean exports to China dropped 75 percent between 2017 and 2018, as China bought soybeans from other countries while exchanging tariffs with the U.S.
President Trump, however, said he will not lift America’s $360 billion of tariffs on Chinese goods until Phase Two is negotiated and implemented.