Navigating tariffs in Minnesota

By Doug Loon
President and CEO
Minnesota Chamber of Commerce

While our focus here at the Chamber remains on legislative matters at the state capitol, I want to take time this week to lay out tariffs and trade and their impact on Minnesota’s economy.

Minnesota’s trading relationships with Canada and Mexico have long been vital to our economy, and their importance has only grown in recent years. Many products originate in Minnesota and make their way to Canada and Mexico, just as components from those countries contribute to manufacturing and food production here before entering the global marketplace. These relationships are essential.

Since 2016, Minnesota’s trade has shifted away from China and increasingly toward North American partners—Canada, Mexico and the United States—deepening supply chain integration, particularly in manufacturing and natural resource sectors. It’s important to recognize that while targeted tariffs can be used to address unfair trade practices or dumping, broad sweeping tariffs on entire countries can be harmful not just to the global economy but to the U.S. economy as well.

The uncertainty surrounding tariffs can also create long-term negative impacts on businesses. If tariffs are being used as a negotiating tool, we hope for a resolution that restores certainty to the marketplace. The Minnesota Chamber continues to analyze key trade data and trends. Since 2019, exports to Canada have surged by 49%, and exports to Mexico have grown by 37%, fueling overall economic growth in Minnesota. In contrast, exports to Minnesota’s next three largest markets—China, Germany and Japan—have declined significantly. Nearly half of Minnesota’s exports went to Canada and Mexico in 2023, making these partnerships increasingly important.

As we continue discussions on trade and tariffs, we recognize the role they play in global negotiations. However, uncertainty leads to increased costs for Minnesota companies operating in the global marketplace. This is an issue that will continue to evolve, and we will monitor developments closely.

Looking ahead, next week we will focus on legislative activity, particularly with the release of a new economic forecast for the state. As we move through March into April, legislative efforts will accelerate, and we look forward to advancing policies that enhance Minnesota’s business competitiveness. We hope lawmakers will support pro-growth initiatives this session.  

Thank you for your continued support of the Minnesota Chamber and the greater business community. I look forward to catching up with you next week on the Minnesota Business Podcast.