Greater Peoria Economic Development Council CEO Chris Setti suspects financial uncertainty may continue to linger as the Trump administration’s trade policies keep changing.
Trump on Wednesday announced a 90-day pause on increasing tariffs for most countries, except China. Setti said it’s hard to forecast what the full effects of tariffs on the local economy might be.
“We’ve all kind of learned that we’re in a chaotic moment,” said Setti. “But it does feel like it evolves from day to day, so I don’t know that we know yet what we don’t know, and we will see as things unfold what those impacts are.”
U.S. stocks have been on a roller-coaster through Trump’s shifting tariff moves, initially spiraling, then surging Wednesday afternoon following the pause announcement — before tumbling again Thursday.
Setti attributes the volatility to investors not having a clear idea of what to expect next.
“I’ve said this before in lots of different ways, whether it’s taxation or whether it’s regulation, businesses invest when they are certain of the outcome, or at least relatively certain of the outcome,” he said. “Years ago when the state of Illinois couldn’t pass a budget, we saw a lot of disinvestment or a lot of freezing of investment decisions simply because nobody in the business community could understand how Illinois was going to solve its problems.
“They just got paralyzed, and I think what we’re seeing, at least initially, is a lot of just that little parallelization and not understanding how this is going to impact their business.”
Setti said while the short-term impacts from the tariffs could result in higher prices for consumer products, there potentially could be long-term benefits for the Peoria area.
“If the president’s policy directive is really aimed at increasing domestic manufacturing, I think in the long run that bodes very well for a state like Illinois and a region like Greater Peoria that is very strong in the manufacturing sector,” he said.
Setti recently returned from Mexico as part of the delegation on Gov. JB Pritzker’s trade mission. He said the trip was productive in establishing connections.
“It was very apolitical. The words ‘tariff’ and ‘President Trump’ were not mentioned at all, but there was a lot of obvious discussion around the uncertainty of the current times,” he said. “But in terms of a trade mission, I thought it did exactly what you’d want to do, which is to showcase your community.
“I got a chance to meet a couple dozen people who now have a business card that says ‘Peoria, Illinois’ on it, and that’s really the goal of these sorts of trade delegations. It’s not a hunting trip where you’re going to come back with a business over your shoulder and say, ‘Look what I got.’ Rather, it’s to build relationships, to create exposure. It’s more of a marketing effort.”
Setti said he understands why the initial reactions to the tariffs have stoked fears about where the economy is headed.
“I’ve spoken to some of the suppliers and some of the smaller and medium manufacturers, and they’re concerned, obviously, that the cost of goods is going to increase and either squeeze out their profit margins if they have to absorb those costs, or will be passed along to the next person or the next step in line,” he said.
“So, that’s obviously a concern: Does this end up causing a worldwide recession? And then what does that mean just for demand, for the products that everybody is making and trying to sell?”
Setti said while the manufacturing sector is getting a bunch of the immediate attention, the ramifications from the new trade policies also will have a significant influence on agriculture.
“We export a lot of our corn and a lot of our soybeans to places like Mexico and China,” he said. “If our corn and soybean and other products are then going to be tariffed so that they become price uncompetitive against a country like Brazil or Argentina or somebody else that also grows these things, that could have a ripple effect as well.”
