Report: China tariffs tab approaches $1 billion for Minnesotans

Minnesotans have faced nearly $1 billion in additional tariffs since February 2018, according to a new report from advocacy groups favoring global trade.

Using import and export data from the U.S. Census Bureau and the U.S. Department of Agriculture, consultants for the groups Americans for Free Trade and Farmers for Free Trade said new tariffs on Chinese imports totaled $632 million in Minnesota from February 2018 through August 2019. In addition, Minnesota farmers and other businesses faced $343 million in retaliatory tariffs placed on American exports that cut their sales significantly.

In August, the tariff toll on Minnesotans was $60 million for importers of Chinese products and $46 million for those facing Chinese retaliation, said Americans for Free Trade, a coalition of other trade groups whose members include Minnesota multinationals such as Best Buy, Target Corp., 3M, Ecolab, Cargill, Medtronic and General Mills.

"Minnesota businesses know the trade war is seriously damaging our economy, killing American jobs and making goods more expensive for American families and small businesses," Americans for Free Trade spokesman Jon Gold said in a statement. Despite the hundreds of millions of dollars in import tariffs paid by Minnesota businesses and the decimation of Minnesota soybean sales by Chinese retaliation, "we are no closer to a deal with China than we were before the trade war started."

The White House referred a question about the tariffs to the U.S. Trade Representative's Office, which did not immediately respond.

The global trade groups' report comes as negotiators from the U.S. and China try to craft a deal before the U.S. adds another 5% to the tariffs currently imposed on $250 billion of Chinese imports. President Donald Trump delayed imposition of those new tariffs from Oct. 1 to Oct. 15 to give representatives from the world's two largest economies time to agree on terms that will address what the administration and many American businesses consider inequities and unfair trade practices in the current system.

The existing tariffs have already taken a big toll in Minnesota, said Dan Anthony, an economist for the Trade Partnership, which consulted on the new report. Minnesota businesses that depend on Chinese imports paid increasing amounts of tariffs as the Trump administration applied a series of levies throughout 2018. Those who could afford to hoard inventory did so in hopes that a trade deal could be reached before they ran out and had to buy higher-priced Chinese goods.

Those inventories are now gone, Anthony said, meaning the tariffs paid by Minnesota businesses are again on the uptick.

"This is getting worse instead of better," he said. Without a trade deal, businesses will soon be making "hard choices" which could include consumer price hikes and/or hiring freezes.

Meanwhile, Minnesota soybean farmers and other businesses whose exports are subject to retaliatory tariffs are struggling with reduced sales.

Minnesota companies not facing retaliation saw exports rise 10% year over year, Anthony said.

Businesses and farms facing retaliation saw exports decline by 23% from September 2018 to August 2019.

Jim Spencer • 202-662-7432