The threat of tariffs were an overriding concern during a trade trip to Mexico involving business leaders from Illinois, including two from Bloomington-Normal.
The Illinois delegation which spent four days in Mexico City last week included close to 70 members from various sectors of the state's economy. There were two key areas of focus: agriculture and advanced manufacturing.
John Lumpe is executive director of the Bloomington-based Illinois Soybean Association. Mexico is a big customer for Illinois soybeans.
Lumpe said he hopes that doesn't change in this current tariff climate that has some Illinois farmers freaked.
“This is changing sometimes on a sometimes hourly basis,” Lumpe said in an interview on WGLT’s Sound Ideas.
“We’re going to continue to work together just because the higherups in the [Trump] administration are doing this. We are committed to working together and making sure we can still maintain a consistent supply down to Mexico.”
Lumpe said Mexico leaders talked about buying more soybeans from Brazil instead. He said if that were to happen, it would reduce demand for U.S. exports and would drive down price.
“The cost will hit the farmer. The farmer is always the one to feel the pinch,” Lumpe said.
The trade trip also included discussion about Illinois corn, pork and beef.
Patrick Hoban from the Bloomington-Normal Economic Development Council, who was also on the trip, said the threat of tariffs creates uncertainty.
“[It’s] almost unnecessary uncertainty, especially when it comes to the cost of goods sold. For us in economic development, that uncertainty is what kills deals,” Hoban said.
Hoban said he would welcome a U.S. manufacturing boom that the tariffs are intended to create, but he said that's not going to happen overnight. He raised a hypothetical scenario where Mexico would want to move all of its auto production to the U.S.
“Right now to duplicate the automotive industry, which makes up 60% of [Mexico’s] economy, we’d have to build 18 auto plants here to the tune of $50 billion,” Hoban said. “We’re struggling right now to maintain employment for who we have, let alone 18 more plants.”
Mexico faces 25% tariffs from the U.S. on automobiles, steel and aluminum, while the Trump administration excluded Mexico from the global tariffs President Trump announced last week. Mexico has so far decided against retaliatory tariffs. against the U.S.
Hoban said Illinois could land more smaller auto manufacturers and auto parts suppliers. He said that's what they are working to attract.
“Definitely we would like to see them come stateside,” he said.
Hoban said the trip was valuable for him not only to meet with leaders in Mexico but to share contacts with other representatives from Illinois.
“It doesn’t really matter who is in charge; you have to keep the information flowing in order to have a return on your long-term investment,” Hoban said, noting he’s worked with four Illinois governor administrations in the 18 years that he’s been in economic development.
