How Minnesota fits into the bigger global trade picture

As the federal regime continues to vacillate on a new tariff regime consumers employees and businesses in Minnesota are left wondering how worried or how hopeful they should be about Minnesota contract For clues on how tariffs and bargain deals might end up affecting the state we can look at how Minnesota has already positioned itself in the global economic system To be clear Minnesota s regime and state agencies can t set international pact approach But Gabrielle Gerbaud who directs the Minnesota Commerce Office revealed in an interview that state initiatives can influence business relationships and send a message to overseas partners No matter what is happening at the federal level we are open for business Gerbaud explained function use strict window addEventListener message function a if void a information datawrapper-height var e document querySelectorAll iframe for var t in a facts datawrapper-height for var r i r e i i if r contentWindow a source var d a information datawrapper-height t px r style height d How Minnesota trades with the worldIn Minnesota exported billion worth of goods to countries everything from aerospace products to vehicles to pharmaceuticals The value of those exports represented of the state s gross domestic product GDP the total value of goods and services produced by the state Minnesota s businesses take on much of the heavy lifting in terms of how Minnesota is positioned in the global business sector Export-oriented businesses decide when and where to expand operations overseas what to sell in foreign markets and how to price their products so that they are competitive abroad while remaining profitable for the company in Minnesota Import-driven companies have several of the same considerations such as deciding where to source their inputs from to best manage a changing regulatory landscape all while maintaining quality control over the final product assembled in Minnesota The Minnesota Bargain Office can encourage international business such as by offering modest loans to small- and medium-sized businesses to attend business conferences or inviting them on deal missions headed by Gov Tim Walz which can allow these smaller enterprises to form lasting relationships with overseas partners and better understand how business works in anticipated overseas markets Deciding where these contract missions go as well as providing expertise for businesses seeking to approach foreign markets and encouraging non-American companies to invest in Minnesota is about as far as the state agency goes Gerbaud declared The state s business group can exert pressure on the state s congressional delegation over federal transaction strategy she added Minnesota s economic system and contract by the numbersBy the numbers it appears that companies individual decision-making processes have been on the whole a boon for the state In up-to-date years Minnesota businesses have remained competitive on the world stage with a or billion increase in the state s export value between and according to the Office of the United States Bargain Representative function use strict window addEventListener message function a if void a material datawrapper-height var e document querySelectorAll iframe for var t in a content datawrapper-height for var r i r e i i if r contentWindow a source var d a statistics datawrapper-height t px r style height d There are in the present more than exporters in Minnesota responsible for supporting roughly jobs according to Gerbaud Eighty-six percent of those exporters were small- or medium-sized businesses with employees or fewer the U S commerce office notes With a nominal GDP of over billion in according to the U S Department of Commerce s Bureau of Economic Analysis Minnesota s economic output is greater than the Philippines but slightly less than Norway based on International Monetary Fund IMF estimates of those countries economies And there is evidence that this economic output would not be accomplishable without the state s exporters with the Minnesota Chamber of Commerce noting that the value of exports accounted for of the state s GDP in In other words Minnesota has much to offer the world in terms of goods and services particularly in industries where it has become a pioneer This includes the anatomical devices and advanced optics industries companies like Medtronic and Boston Scientific with Minnesota exporting billion worth of goods in those sectors last year The state s top exporting sector is agriculture which accounted for over billion in making Minnesota the fourth largest agricultural exporting state in the country that year according to the U S Department of Agriculture However because numerous agricultural products are shipped to other states to be processed or consolidated before being shipped overseas they are not consistently counted in the Minnesota Exchange Office s numbers as being Minnesota exports Minnesotans contract with almost every country in the world from our top three partners of Canada Mexico and China which together consume over half of the value of Minnesota s exports all the way to the world s newest state of South Sudan which imported worth of Minnesota goods last year function use strict window addEventListener message function a if void a details datawrapper-height var e document querySelectorAll iframe for var t in a details datawrapper-height for var r i r e i i if r contentWindow a source var d a facts datawrapper-height t px r style height d Minnesota imports plentyHowever having a bustling and diverse financial sector does not mean that we will have everything we need and want While Minnesota may be a leader in biological device innovation those items do not make for ideal stocking stuffers or birthday gifts That may explain why one of our biggest categories of imports is toys games and sports equipment Minnesota as a whole purchased over billion worth of these items last year with billion worth coming from China alone Overall more than billion of imports flowed into Minnesota in with fuel and oil medicinal and optical products machinery and electrical equipment accounting for over half of that topline number function use strict window addEventListener message function a if void a statistics datawrapper-height var e document querySelectorAll iframe for var t in a figures datawrapper-height for var r i r e i i if r contentWindow a source var d a statistics datawrapper-height t px r style height d Addressing the U S s agreement deficit the idea that we import more than we export has become a central tenet of the Trump administration s pact guidelines For Minnesota Gerbaud mentioned it makes sense that there s an imbalance Unless you produce of everything that is needed by your consumers in your own country you re constantly going to need to import things she declared And certain things are not worth making here for example textiles So there are certain products that are constantly going to be cheaper for everybody if we import them While cautioning against overgeneralizations that beatify pact surpluses and demonize deficits Gerbaud does accept that there are certain classes of goods that are best manufactured in the country such as critical pharmaceuticals or anatomical equipment She noted that early during the COVID- pandemic there were shortages chosen perceived certain real of things like masks that could have been alleviated if there was more in-country production of these items function use strict window addEventListener message function a if void a input datawrapper-height var e document querySelectorAll iframe for var t in a records datawrapper-height for var r i r e i i if r contentWindow a source var d a figures datawrapper-height t px r style height d Minnesota exchange trendsBroadly speaking there is not much movement year-to-year in terms of Minnesota s top or so trading partners Canada Mexico and China perpetually make the podium They are then followed by a fairly consistent smattering of European and Asian countries Chosen are there due to history and economic heft such as Japan Others because they remain a gateway to even larger markets such as Belgium whose port city of Antwerp is considered a primary entry point into the European Union And one in particular the United Kingdom was consistently in our top export and import markets due in part to the special relationship between the governments in Washington and London However this last year the U K fell to th on Minnesota s list of export markets potentially due to knock-on effects of Brexit Gerbaud of the MinnesotaTrade Office reasoned Among our the greater part major trading partners there has been particular jostling between Mexico and China for the position of our second largest trading partner with Mexico gaining an advantage after President Trump enacted tariffs on China in his first term and President Biden held largely the same program But Minnesota s largest trading partner whether measured by import or export value is consistently Canada For that reason Gerbaud is less concerned with the day-to-day oscillations in tariff agenda than she is with the outcome of a process still over a year away On July the United States-Mexico-Canada Agreement USMCA Trump s successor treaty to the Clinton-era North American Free Pact Agreement NAFTA must be jointly reviewed by Canada Mexico and the U S Despite being a -year agreement this six-year review has the possible to either allow the agreement to continue until or dissolve it or lead to new negotiations Another more imminent point of concern for North American contract is the federal poll that Canada will hold next Monday Depending on which party takes or maintains power the new regime could take a confrontational elbows out approach to Trump or opt instead to forego aggressive posturing and negotiate behind the scenes like Mexico s President Claudia Scheinbaum is likely doing Those decisions Gerbaud noted will development in two different stories for Minnesota s businesses and consumers with the anticipated for extensive downstream effects As with so much else in an increasingly turbulent economic milieu there is little we can do but wait and see The post How Minnesota fits into the bigger global commerce picture appeared first on MinnPost