
Minnesota Now Starting to Feel Economic Effects From Tariffs
Tariffs have been in the news for a while now, but we're finally starting to see some concrete economic effects of those policies here in the Land of 10,000 Lakes, and it's not necessarily good news.
The issue of trade has been a hot topic since January, when the Trump administration threatened to impose tariffs on just about all incoming products from foreign countries. The fear for Minnesota producers is that those foreign governments would likely then place a retaliatory tariff on American products-- including those made here in Minnesota-- heading to their countries.
Trade is big business here in Minnesota. According to the Office of the United States Trade Representative (USTR), Minnesota exported $24.9 billion worth of products in 2023. That figure is up 20 percent, or just over $4.1 billion, from our previous export levels in 2013. Exports also account for nearly 118,000 jobs across the state.
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According to the USTR, Minnesota's largest manufacturing export category is computer and electronic products, which accounted for $4.4 billion of Minnesota's total goods exports in 2023. Other top manufacturing exports include:
- Machinery ($4.0 billion)
- Transportation equipment ($2.4 billion)
- Miscellaneous manufactured commodities ($2.1 billion),
- Food and kindred products ($1.9 billion)
Minnesota is also the fourth-largest agricultural exporting state in the U.S., exporting over $9.2 billion worth of agricultural products in 2021, the Minnesota Department of Agriculture notes. The biggest products included soybeans, corn, feed, red meat, dairy, and wheat.
And now, a new report from the Minnesota Office of Employment and Economic Development (DEED) says that overall, exports from Minnesota declined 6% during the first quarter. While overall U.S. exports grew modestly by 3% during this period, Minnesota was among 20 states nationally, and eight of the 12 Midwest states, that experienced declines or near-zero growth in exports, DEED said.
Specifically, DEED said sales slumped to Minnesota's top two export markets, Canada (down 3%) and Mexico (down 16%). Overall, global sales for eight of Minnesota's top 10 exported products fell in the first quarter, including:
- Vehicles (down 25%)
- Cereals, including corn and wheat (down 63%)
- Optic, medical goods (down 5%)
While the overall numbers declined, there were some Minnesota categories that saw increases during Q1, DEED reported, noting sales increases to the Middle East (up 12%) and in European markets outside the European Union (up 17%):
- Mineral fuels, oils (up 4%)
- Plastics (up 4%)
- Dairy, eggs, and honey (up 85%, driven by eggs)
- Oil seeds, misc. grain (up 36%, driven by soybeans)
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Gallery Credit: Minnesota Now
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