Skip to main content
Updated:
Original:

How would Minnesota be affected if NAFTA is renegotiated or scrapped?

With the future of NAFTA up in the air, we look at where Minnesota stands with exports and imports.
Author:

The subject of NAFTA is in the news again with President Donald Trump hinting he may withdraw the U.S. from the trade agreement, before confirming it will stay in for now but will renegotiate terms with Canada and Mexico.

The North American Free Trade Agreement passed in the 1990s eliminates most tariffs on goods traded between the three nations and removes other regulatory barriers, but it has been criticized by Trump who feels like the U.S. gets a raw deal as it imports more than it exports.

As a state that enjoys trade particularly with Canada but also Mexico, the implications of a renegotiated NAFTA or withdrawal from it could have huge implications for Minnesota. GoMN has taken a look at how much trade the state does with the two nations.

What do we import?

The biggest implications for ordinary Minnesotans would be that the renegotiations leads to extra tariffs being imposed on goods imported into the U.S. from either of the two countries.

These include the everyday consumer goods that we pay for, so additional taxes on these goods would likely see prices increase at the register.

What do we get from Canada?

Minnesota imports around $7.5 billion-worth of goods and services from Canada every year, according to the Canadian Government. Of that $2.9 million is crude petroleum to be used mainly to fill our gas stations.

As it doesn't have any oil reserves itself, Minnesota imports around 70 percent of our crude oil from Canada along the Enbridge-Mainline Pipeline, this Minnesota House research paper says, with this topped up by deliveries from the Bakken oil fields of North Dakota.

Any extra tariffs on this oil would eventually be passed on to consumers at the pumps, so filling your car would be more expensive.

The second and third biggest imports from Canada are natural gas and electricity, with Minnesota importing $461 million and $346 million worth respectively.

Again, an increase in cost of these products will likely be passed on in gas and electricity bills, particularly with natural gas becoming a more significant part of our energy generation as companies like Xcel move away from coal-fired plants.

What do we get from Mexico?

Mexico is Minnesota's 3rd biggest trading partner (after China and Canada), and imports roughly $2 billion of goods every year.

Extra costs on goods we get from Mexico won't necessarily have a direct impact on our wallets the same way it would with Canadian imports, but it could have significant implications for Minnesota businesses that make and sell products in the U.S., or export them to other countries.

The Star Tribune reported that one of the most valuable products the state currently imports from Mexico is electrical machinery, such as motors and generators, so a change to NAFTA terms could see additional costs to the electronics and manufacturing industry in the state.

The same goes for the medical device industry, which is Minnesota's biggest export industry. MPR reports that many of Minnesota's medical device companies have facilities in Mexico and shift products back and forth between the countries during the manufacturing process.

What do we export?

Canada and Mexico are Minnesota's two biggest export markets, and the fear among businesses is that any tariffs the U.S. imposes on imports from Mexico and Canada under a renegotiated/scrapped NAFTA would be met with similar tariffs imposed by the two countries.

This could increase the costs for Minnesota businesses that export to Canada and Mexico, or potentially see them lose business if these countries choose to find solutions cheaper than importing from the U.S.

Medical products and civilian aircraft, engines and parts are Minnesota's two biggest export products, according to the U.S. Census Bureau.

What do we sell to Canada?

Minnesota exports around $4 billion-worth of physical goods and $864 million of services to Canada, with automobiles the biggest export in 2016.

This would include utility vehicles and ATVs made by Minnesota-based companies like Polaris and Arctic Cat, with Canada importing $293 million-worth of vehicles from Minnesota last year.

After this, optical, medical and precision instruments from companies like Medtronic are the second biggest export, worth $230 million last year, with drinks and alcohol third at $222 million.

What do we sell to Mexico?

Minnesota exported more to Mexico – $2.4 billion in 2016 – than it imported, and the state's agricultural industry is a major reason for this.

Around $800 million in agricultural commodities like corn and soybeans were sold by Minnesota farmers to Mexico last year, and according to MPR it would be the farming industry that would feel the impact of extra trade tariffs from Mexico first.

Food exports to Mexico from Minnesota-based companies like Cargill and Land O'Lakes could also be affected, with these two companies joining around 100 others in signing a letter to President Trump in January to remind him that agriculture and proceed food exports from the U.S. have quadrupled since NAFTA passed 23 years ago.

Other exports to Mexico include machinery, vehicles, plastics and iron and steel products.

Next Up

D'Angelo Russell

With KAT out, Timberwolves can't upset Nets

D'Angelo Russell stepped up but couldn't overcome Brooklyn's firepower.

Everson Griffen Vikings dot com

Everson Griffen confirms he has bipolar disorder

"I’ve been running from it a long time. I’m not ashamed of it anymore.”

Angela Renee Jones, St. Cloud murder suspect

St. Cloud suspect now charged in two local murder cases

Both murders happened within a day of each other in June.

st anthony 3 crop

Twin Cities police ask for help finding missing 16-year-old

Police say all her family and friends have been contacted, and none of them know where she is.

mpd suspect 12.3.21 - 1 - CROP

MPD releases photos of shooting suspect, asks for public's help

The man is wanted in connection with a fatal shooting that happened Wednesday evening.

redmons popcorn colbert 2

Support grows for Redmon's Popcorn after shop's sudden closure

The county also commented on the situation, saying it hopes to help owner Zack Redmon.

prior lake high school

Prior Lake HS investigating another 'racist' video involving student

The principal said the social media video was reported to them this week.

Screen Shot 2021-12-03 at 3.08.27 PM

Walz: Minnesota has secured 1 million rapid, at-home COVID tests for kids

It comes as the delta variant continues to surge in Minnesota, and the omicron variant might follow.

boundary waters

Forest Service limiting permits to BWCAW due to damage, overcrowding

Visitors have been cutting down trees and have been forced to compete for campsites.

police lights

Lockdown update: Armed man threatened to go to Kimball High School

A high school and elementary school near St. Cloud went into lockdown as a precaution.

chaska sewer

People in Chaska are flushing the wrong crap down the toilet

Water and sewer crews in Chaska have had to clean the same pump four times in the past seven days.

Related

How Minnesota's congresspeople voted on the American Health Care Act

The new health care bill passed the House, and now heads to the Senate.

Here's how Minnesota lawmakers are responding to Trump's Syria missile strike

There's a running theme of "something needs to be done about Assad, but ask Congress first."

Minnesota lawmakers question the timing of Comey's firing

"We are witnessing a Constitutional crisis," said Rep. Keith Ellison.

Who would be the winners and losers from the Senate tax bill?

The Senate passed the tax bill late Friday night.

Trump administration to release revised travel ban executive order next week

The original executive order has been temporarily blocked by the courts.

Update: Federal government responds to WA, MN lawsuit; arguments coming Tuesday

The federal government's response called the executive order a "lawful exercise."

4 reasons why the U.S. leaving Paris climate deal might not be the end of the world

With the federal government taking a step back in the climate fight, states and cities are coming to the fore.

Some key points from President Trump's joint address to Congress

Healthcare, immigration and budget announcements could have implications for Minnesotans in the future.