Illinois’ manufacturing and farming communities are excited about the new trilateral trade agreement President Donald Trump announced between the U.S, Mexico and Canada. But the state’s leading manufacturers’ group says Illinois must address its poor business climate and farmers say the U.S. must continue making deals with other countries in the face of a trade war with China.
After months of trade uncertainty, Trump said Canada is now on board with Mexico to forge a new trade deal with the United States. He decried the North American Free Trade Agreement signed by the U.S. in the 1990s as a horrible deal and campaigned to get rid of it. On Monday, he said he’s fulfilled that promise.
Called the United States, Mexico, Canada Agreement (USMCA), Trump said it will make North America a manufacturing powerhouse.
“That means more auto parts and more automobiles will be manufactured in the United States,” Trump said. “We will be manufacturing many more cars.”
Illinois Manufacturers’ Association's Mark Denzler said that’s great news for the state’s automotive manufacturers that employ thousands of workers. It’s also good news for chemical, pharmaceutical and food manufacturers, he said.
But Denzler warned Illinois could miss the boat if it doesn’t address the state’s negative attributes.
“Workers’ compensation, higher taxes, we’re looking at a graduated income tax for example, higher minimum wage, all of these things add up and make it more difficult to do business in the state of Illinois,” Denzler said.
Illinois has the highest workers’ compensation costs in the Midwest, and seventh highest in the nation. The state’s property taxes are also among the highest in the country.
For farmers, Trump said the USMCA opens up the North American marketplace to make things more fair and reciprocal.
“The deal includes a substantial increase in our farmer’s opportunities to explore American wheat, poultry, eggs and diary, including milk, butter, cheese, yogurt and ice cream,” Trump said.
Trump had long blasted Canada for having a nearly 300 percent tariff on U.S. dairy products.
While Illinois dairy products may take a backseat to dairy products from states bordering Canada, Illinois Farm Bureau President Richard Guebert said the trade deal is still great news. He said trade negotiations must now continue elsewhere.
“Let’s work on the other countries as well, the [European Union], Japan and build those markets knowing that China is going to be a little ways down the road,” Guebert said.
In an effort to curb what he called unfair trade practices and intellectual property theft, Trump has imposed tariffs on all kinds of Chinese products. China has responded in kind with no end in sight.
The USMCA trade pact must still be ratified by all three countries before it replaces the NAFTA agreement.