How Trump's tariffs could impact Minnesota
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Minnesota businesses, consumers and lawmakers are bracing for the effects of President Trump's tariffs, which were announced Wednesday.
The big picture: The reciprocal tariffs, which target vital trading partners with massive levies, could raise consumer prices, interrupt business activity and upend global trade, Axios' Courtenay Brown and Neil Irwin write.
- Stocks fell sharply Thursday, leading to the worst day in five years for with U.S. indices.
- China retaliated this morning, announcing a 34% tariff on all U.S. exports. U.S.
State of play: Minnesota imported $40 billion worth of goods last year, per the Star Tribune.
- The state and its top industries rely heavily on items produced by Canada, China and Mexico, while exporting more than $26 billion in state-produced goods to other nations.
Case in point: Everything from the oil refined into gas that we pump into our cars to the oats baked into General Mills' Cheerios, per the Strib, and piglets populating our major pork-producing industry all come from Canada.
- Medical devices and machinery lead the list of our top exports.
Zoom in: Some of the state's biggest Fortune 500 companies are poised to take a big hit from the policy.
- 💻 Best Buy gets about 55% of the products it sells from China and 20% from Mexico, according to an SEC filing. The retailer's stock was down almost 18% yesterday.
- 🎯 Target, which had already warned that the policy could cut into sales and profits and lead to higher prices for consumers, was down nearly 11%
🌾 Plus: Farmers and top state officials fear the tariffs could have a lasting effect on Minnesota's already stressed agricultural sector, raising prices for equipment and fertilizer and dampening demand for exported products grown here.
Friction point: Democratic politicians warned this week that the administration's "erratic" policies on both tariffs and spending cuts will hurt Minnesota residents and worsen the state's already shaky budget situation.
- "Look, it's gonna hurt," Gov. Tim Walz told WCCO Radio on Thursday. "It's gonna hurt Minnesotans particularly because the worst impact is always felt on agricultural economies."
The other side: GOP U.S. Rep. Tom Emmer, a Trump ally and House majority whip, defended the policy in a town hall Wednesday night, arguing the policy will ultimately make America's economy stronger.
- "There's still going to be some choppy waters, but when we come out of it on the other side, it's going to be much better than it was beforehand, and certainly much better than it was the last four years," he said, per MPR News.
The intrigue: GOP state legislative leaders avoided weighing in directly on the issue Wednesday when asked about tariffs after a meeting with the governor.
- House Speaker Lisa Demuth (R-Cold Spring) said while Republicans plan to "keep an eye on what's happening at the federal level," state lawmakers should remain focused on factors they can control and "what is known at this time."
What we're watching: Nationally, the tariffs could translate into a 2.3 percentage point increase to overall inflation this year, according to new estimates from the Yale Budget Lab.
- That would cost the average household $3,800.
What's next: The new tariffs are set to take effect next week.
Go Deeper: Behind the Curtain: You gotta believe