Minnesota businesses brace as Trump increases tariffs on China to 145%
Despite thousands of miles and an ocean between them, some Minnesota businesses rely on deals with China.
"I can't sleep because it's going to be a big impact for our customers," Tracy Tran, who co-owns Asia Mall, said. "Some suppliers have already sent letters informing us that the prices will increase, and some just did a verbal."
Tran is already feeling the impacts of trade tensions with China. While President Trump announced on Wednesday a 90-day pause on most of his new tariffs, the president also said he's increasing the tariff rate on goods imported from China to 125%. On Thursday, the tariffs were raised to 145%.
"If that is going to happen, we are going to look at other alternatives in suppliers. We're going to try our best to keep our prices reasonable for consumers," Tran said.
Last year, the state of Minnesota saw nearly $6.7 billion of goods imported from China.
"They're our second-largest trade partner on imports... so 15% of our imports," said Dr. Bruce Corrie, an economics professor at Concordia University, St. Paul.
China is also the state's third-largest market, with more than $2.2 billion in goods sent there last year alone.
"These are things like medical equipment, pharmaceuticals, meat, dairy products," Corrie said. "All of this takes time. I like to think 'blue ocean,' with every challenge comes an opportunity."
Minnesota-based Best Buy's CEO said in a March earnings call, "China and Mexico remain the No. 1 and No. 2 sources for products we sell, respectively. While Best Buy only directly imports 2-3% of our overall assortment, we expect our vendors across our entire assortment will pass along some level of tariff costs to retailers, making price increases for American consumers highly likely."
"It is important to remember that China and the United States are deeply complementary economies," the Minnesota Chinese American Chamber of Commerce told WCCO in a statement. "China is the largest market for American agricultural exports, and retaliation in this sector has directly harmed Minnesota's farmers and the broader Midwest agricultural economy. On the other hand, many Chinese manufacturers rely on American innovation, technology, and components. From agriculture to tech, manufacturing to research, our economies benefit most when they work in partnership — not in conflict."
For Minnesota-based toy retailers, the feeling of fear is palpable.
Nearly 80% of U.S. sold toys come from China, according to trade group ASTRA.
"This is madness. This is no way to run a country," said Mischief Toys Owner Dan Marshall on Thursday. "I don't know if toys that I order now, when they ship, what they're going to cost. How do we plan for that?"
In Hopkins, Kiddywampus owner Amy Saldhana says with tariffs so high, price jumps are a very real consideration.
"Prices are going up – there's no way to sugar coat this," she said. "If I have to pay more for a product, Unless it's a very nominal amount, I'm going to have to pass the cost to consumers."
The Trump administration says at least 75 countries now want to negotiate trade deals with the U.S.
