President Donald Trump's tariff strategy aims to reshore U.S. manufacturing; however, food businesses, including those in Illinois, face challenges due to disrupted supply chains linked to local agricultural conditions. Produce such as bananas, pineapples, and mangoes depends on specific climates, notes Peter Testa, CEO of Testa Produce, a Chicago-based distributor. Testa Produce supplies various institutions across Illinois, Wisconsin, and Indiana, utilizing a vast warehouse in the Back of the Yards neighborhood to store and distribute a range of products.
Produce from warm climates cannot be reshored to the U.S. for year-round availability, unlike certain industrial goods. Perishables also present challenges in terms of stockpiling. U.S. Rep. Raja Krishnamoorthi, during visits to Illinois food businesses, remarked, "We're not going to grow bananas in the U.S. or coffee. But it feels like food is being used as a weapon."
The International Fresh Produce Association commented on the complexity of fresh produce trade, influenced by seasonal and regional factors. They stated that tariffs disrupt markets and increase consumer costs, placing strain on growers and producers. In April, Trump introduced tariffs on numerous countries, later pausing them for 90 days. Despite this pause, many imports face a 10% tariff, with potential increases post-pause.
Under the U.S.-Mexico-Canada Agreement, many goods are exempt from tariffs, but Testa Produce sources from countries facing tariffs, such as Costa Rica and Ecuador. The uncertainty of tariffs complicates planning and budgeting for food buyers like Testa Produce, leading to confusion among customers.
Tariffs also impact U.S. farmers, with retaliatory tariffs affecting exports. Illinois, a leading exporter of soybeans, faces uncertainty regarding market prices. Ron Kindred of Kindred Farms expressed concerns about soybean pricing and the broader impact on competitiveness. The American Farm Bureau Federation noted that farmers and rural communities bear the brunt of retaliatory measures.
While the U.S. and China have agreed to a 90-day pause in tariffs, uncertainty persists. The International Fresh Produce Association acknowledged the positive step towards a stable trade environment but emphasized the challenges in regaining lost market share.
Source: WBEZ Chicago