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Minnesota Manages to Grow Exports Amid Trump Trade Chaos

KELO Radio spotlights a report from Minnesota’s Department of Employment and Economic Development bragging up Minnesota’s 1.5% Quarter 1 growth in exports compared to Q1 2018.

(I find significance in the fact that the first word in Minnesota’s department on such matters is Employment, while the first word in the counterpart agency in South Dakota is Governor’s, with no mention of the sine qua non of economic development, workers.)

We will get no such brag sheet from the South Dakota Governor’s Office of Economic Development, since South Dakota sold 13% less stuff on foreign markets in the first three months of 2019 compared to Q1 2018:

"Data on Minnesota Exports for First Quarter 2019," Minnesota Department of Employment and Economic Development, May 2019, p. 1, Figure 1.
“Data on Minnesota Exports for First Quarter 2019,” Minnesota Department of Employment and Economic Development, May 2019, p. 1, Figure 1.

Only six other states saw double-digit Q1 export declines: Hawaii (37%), Nevada (31%), West Virginia (16%), Alabama (14%), Arkansas (13%), and Colorado (10%).

Minnesota’s biggest export products are optics and medical equipment; machinery; electrical equipment; plastics; vehicles; pharmaceuticals; food by-products; aircraft and spacecraft (!); stone, plaster and cement; and iron and steel products.

MN DEED, May 2019, Figure 4.
MN DEED, May 2019, Figure 4.

Minnesota would have seen faster export growth if Donald Trump weren’t making America an unreliable trade partner:

During the past decade, China sharply increased purchases from Minnesota and became, at various times, the state’s second- or third-largest purchaser. But over the past year, the U.S. and China heaped new tariffs on each other in a fight that began when President Donald Trump tried to bolster the U.S. steel industry.

Even trading with Canada, Minnesota’s largest trading partner, suffered in the process. Its purchases of the state’s goods were down 3% to $1.02 billion in the first quarter.

…In the wake of the trade war, state manufacturers have sought replacement suppliers for components and new customers for finished goods.

In recent weeks, Polaris Industries, Banner Engineering, nVent Electric, C.H. Robinson and Minnesota Twist Drill have all discussed efforts taken to curtail the damage.

“Even within an uncertain and challenging trade environment, Minnesota businesses continue to pursue their export strategies, expanding their reach into world markets,” Steve Grove, commissioner of the Minnesota Department of Employment and Economic Development, said in a statement [Dee DePass, “Minnesota Exports Rise to $5.4 Billion Despite Trade War with China, Others,” Minneapolis Star Tribune, 2019.05.30].

Minnesota sold $91 billion less to China, $58 billion less to Singapore, and $32 billion less to Canada. Minnesota made up for those losses by selling $86 billion more to Mexico, $64 billion more to Germany, $22 billion more to France, and $78 billion more to “other” countries. Those gains to Mexico are imperiled by Trump’s latest policy upchuck, a sudden announcement of new tariffs on Mexico that puts trade negotiations with China at risk.

Good grief—how is anyone supposed to do international business amidst all this uncertainty?

4 Comments

  1. mike from iowa 2019-05-31 07:51

    Economic Eunuch (thanks Debbo) in the kremlin annex just tried to easily win the trade war by ramping up tariffs on them brown neighbors directly South of the US. That oughta help South Dakota immensely, don’t you think?

  2. Debbo 2019-05-31 16:16

    De nada, Mike.

    What is Utah doing that they’re up 36%?! Exporting their missionaries?

  3. jerry 2019-06-02 11:07

    Welcome trump farmers to the day after more tariff’s were placed by your dear leader. Your market is leaving you boys and girls, ya better know who your friends are and they sure as hell ain’t the three bone heads you sent to Washington. Either find a Democrat to stand for your rights or demand these three do something other than get their pictures taken. Impeach the criminal element that has corrupted this country.

    “US farmers cannot afford to lose the Chinese market, but farmers in China will be able to withstand the impact of American tariffs, according to a top agriculture official in Beijing.
    Han Jun, vice-minister of agriculture and rural affairs, said China’s retaliatory tariffs on American products – the latest of which took effect on Saturday – now covered “virtually all US agricultural product exports to China”, warning that US farmers could lose the Chinese market for good.” South China Morning Post 6.2.2019

  4. Roger Elgersma 2019-06-03 01:26

    South Dakota cheated China out of millions in the EB-5 scandal, so do not expect them to buy a lot from South Dakota. They might not be able to differentiate between South Dakota beans and Minnesota beans so that might not make a lot of difference when they are not buying beans anyway. But anyone who can beat this trade war is doing something right.

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