A new trade deal the United States reached over the weekend with Mexico and Canada will tamp down uncertainty for American farmers and manufacturers, though concerns remain about a broader trade war.
President Donald Trump on Monday touted the agreement's safeguards for intellectual property and protections for workers, as well as provisions that he said will help American exporters of a wide range of agricultural products. He said the agreement closes "loopholes" that allow car companies to assemble vehicles in Canada and Mexico and sell them in the United States duty-free.
"This landmark agreement will send cash and jobs pouring into the United States and into North America — good for Canada, good for Mexico," Trump said.
Trade harmony across North America is important to a wide range of businesses in Minnesota. Canada and Mexico were the top export markets for Minnesota products last year, with Mexico just ahead of third-place China, according to the state Department of Employment and Economic Development.
Some points of contention remain. Notably, the deal does not remove U.S. tariffs on steel and aluminum on Canada and Mexico — tariffs the United States has also imposed broadly on other countries, leading to retaliatory countermeasures by some. China aimed counter-tariffs on U.S. agriculture products, for instance.
But the deal removes the prospect of reversion to pre-NAFTA barriers on the movement of food and other goods between the United States, Canada and Mexico. Such a change would have disrupted American farmers, food processors and buyers for several years as growing and buying patterns adjusted.
Cargill, the Minnetonka-based company that is the one of the world's largest agriculture processors and a leading trader, issued a cautiously optimistic statement on the new deal while noting it is examining the details. "We strongly support the continuation of the trilateral trading bloc established 24 years ago between the United States, Mexico and Canada under NAFTA," Cargill said.
"The appropriate measure, in our view, is whether USMCA [United States-Mexico-Canada] is better than NAFTA, which has transformed North America into one of the world's most competitive and successful trading blocs," the company said. "At first glance, we're encouraged with efforts to modernize some chapters that specifically affect trade in agricultural goods."