Despite the trade war, Minnesota’s exports rise again
Last week, I wrote that ‘Tariffs are biting into Minnesota’s farm economy‘. As KUNC reported,
The Rural Mainstreet survey for May, released Thursday, shows the survey’s overall index dropping from 50 in April to 48.5 this month. Any score above 50 suggests a growing economy, while a score below 50 indicates a shrinking economy.
Creighton University economist Ernie Goss, who oversees the survey, blames trade tensions and tariffs, saying they’re contributing to losses suffered by grain farmers — although livestock producers are faring better. Still, Goss says, bankers believe “the negatives far outweighed the positives.”
The survey’s confidence index, which gauges bankers’ expectations for the economy six months out, plummeted from 50 to 38.2 — its lowest level in almost two years.
But trade wars have winners as well as losers. Despite all the trouble with trade and tariffs, the Pioneer Press reports that
Exports of Minnesota products continued to grow the first quarter of 2019 after hitting record numbers the year before.
State exports grew to $5.4 billion in the first three months of the year, a 1.5 percent growth over the same months in 2018. That bested the national growth rate of 1.4 percent for the same time, according to a report released Thursday by the Minnesota Department of Employment and Economic Development.
Minnesota businesses exported a record $23 billion in goods in 2018, a 10 percent jump from the year before.
“Even within an uncertain and challenging trade environment, Minnesota businesses continue to pursue their export strategies, expanding their reach into world markets,” DEED Commissioner Steve Grove said in a prepared statement.
It is no great surprise that Canada and Mexico, our neighbors, were ranked first and second as export destinations. Our exports to China were down 13%, but it remained the third biggest destination. A surge in exports to Mexico and Europe more than made up the loss. As the Star Tribune reports,
Minnesota’s goods to Europe rose 14%, while goods exported to Mexico and Canada rose 4%. In contrast, exports to Asia dropped 8%, led by the decline to China. Exports to Central and South America fell 1%.
Minnesota’s exporters are doing well despite the trade war. Imagine how much better they could be doing without it.
John Phelan is an economist at the Center of the American Experiment.