How President Trump’s Proposed Tariffs in Chicago Could Affect the U.S. Economy

CHICAGO (WLS) — President Trump didn’t take action on day one to impose tariffs, but they could possibly come as soon as February 1st.

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Tariffs would apply to products imported from key trade partners such as Canada, Mexico and China.

Speaking virtually to the World Economic Forum on January 23rd, Trump offered low taxes for businesses that make their products in the U.S.

“Mr. Trump stated that if a company chooses not to manufacture its product in the United States, it will be subjected to a tariff,” he said. “The tariff rates may vary, but they will generate substantial revenue, potentially amounting to billions or even trillions of dollars, which will be used to boost our economy and reduce our national debt.”

ABC7 hosted a discussion with Robert Gulotty, an Associate Professor in the Political Science Department at the University of Chicago, and Lou Sandoval, the President and CEO of the Illinois Chamber of Commerce, regarding the potential repercussions of the president’s threatened tariffs on Illinois.

Gulotty highlighted the economic repercussions of mere threats. “We are already witnessing companies taking action to adapt to the situation by relocating their production to more secure locations that are not vulnerable to these tariffs,” he expressed.

“If you go just off the nationalistic policy that he’s kind of campaigned on… there’s this ‘America first’ principle that he’s kind of operating off of,” said Sandoval. “It is a negotiation tactic, you know, in my opinion.”

Sandoval added that Illinois businesses are waiting to see how these threatened tariffs play out and then what is going to be implication for business and for consumers.

Gulotty said some companies are moving production, it may be difficult for them to avoid tariffs.

“Back in the first Trump administration we saw firms moving, for example, away from China toward Vietnam in order to avoid the tariffs that were specific to China. Now, to counteract that, Trump’s advisors have suggested that they’re going to do global tariffs. Not just against Mexico, Canada and China, but against the entire world to avoid this sort of movement of production to avoid them.”

So, what Illinois industries could be most impacted by retaliatory tariffs against U.S. made products including some from Illinois.

Sandoval explained which would be most impacted: “The ag industry specifically. You know, automotive would be impacted immensely. “