Mexico tariffs would hit Illinois hard

Trump penalty would tax state $658M, says U.S. Chamber of Commerce

President Trump addresses supporters in Murphysboro last fall. (One Illinois/Ted Cox)

President Trump addresses supporters in Murphysboro last fall. (One Illinois/Ted Cox)

By Ted Cox

Resistance is rising to President Trump’s threatened tariffs with Mexico.

Late last month, the president — irked by the continued inability on either side to halt immigration across the U.S.-Mexico border — threatened to impose a 5 percent tariff on Mexican goods, set to take effect Monday.

According to the U.S. Chamber of Commerce, that would mean Illinoisans paying a $658 million tax if trade stays level with the $13 billion in goods imported from Mexico last year. And Trump has threatened to increase the tariff 5 percent a month to a maximum of 25 percent by October.

Again, people buying the imports pay that tariff, not the exporter or exporting country.

Mexico is the second-largest trade partner for Illinois. Only three states — Texas, Michigan, and California — import more goods from our southern neighbors.

Many politicians, both Republicans and Democrats, said it was misguided to link economic and immigration policy. U.S. Senate Majority Leader Mitch McConnell of Kentucky said Republicans are opposed, stating, “There is not much support in my conference for tariffs, for sure.”

Democrats, meanwhile, have said tariffs could scuttle the U.S.-Mexico-Canada Agreement, which the Trump administration negotiated last year to replace the North American Free Trade Agreement. Farmers in particular welcomed that trade deal when it was announced last October, bringing some stability to an uncertain export market feeling the effects of Trump’s trade war not only with Canada and Mexico but China — a battle that persists. But the so-called USMCA has yet to be formally approved by Congress.

Last week, shortly before Trump made his latest trade threats, U.S. Rep. Cheri Bustos of Moline told local farmers she was hopeful the USMCA would be accepted. “We need to make sure that we are trading openly and freely with Mexico and Canada,” she said. “It needs to get back to at least where we were before.”

Trump’s tariffs, however, would clearly be a step back.

The Chicago Sun-Times ran a scathing editorial on the whole trade imbroglio Thursday, stating: “We doubt Trump even cares what works (on immigration): what he cares about is stirring up his anti-immigration base in advance of the 2020 presidential election. He needs fresh red meat.”

Yet that base might be even more stirred up when those voters face higher costs for goods ranging from Corona beer to cars, as well as farm machinery produced by Caterpillar and John Deere, both of which have expanded operations into Mexico. And if Mexico imposes retaliatory tariffs, that threatens the $10 billion in goods Illinois sends Mexico annually, in products ranging from car parts to corn.