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Trump tariff plan: Which MN companies might be most affected

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Published  February 3, 2025 11:23am CST
Economy
FOX 9

The Brief

    • With tariffs set to take effect Tuesday for China and Canada, an analysis looked at which Minnesota companies might be hit the hardest.
    • The report points out major Minnesota companies like 3M, Cargil, and Ecolab rely heavily on global trade flows.
    • President Trump announced a one-month pause for the Mexican tariffs. It's unclear if negotiations are ongoing with Canadian leaders.

(FOX 9) - President Donald Trump is set to put in place tariffs against Canada and China on Tuesday, as part of a plan to take on fentanyl, illegal immigration, and trade disparities.

What is Trump's tariff plan?

What we know:

President Trump says, starting Tuesday, the United States will impose a 25% tariff on goods from Canada and 10% on imports from China. Energy imports from Canada, however, will face only a 10% tariff.

President Trump says the tariffs are meant to rectify a number of issues, including to encourage all three nations to take steps to stem the flow of fentanyl into the United States. He also hopes to take on illegal immigration from both Canada and Mexico and reverse trade deficits faced by the United States.

Mexico was set to be included in the 25% tariff. However, President Trump announced on Monday he had reached an agreement with Mexico to pause the tariffs after Mexico agreed to send troops to the southern border.

President Trump has also pledged to increase the tariffs if any of the countries retaliate.

However, Canada announced it plans to put a 25% tariff of its own on $155 billion in U.S. goods. Chinese officials also planned a lawsuit through the World Trade Organization over the tariffs.

Which Minnesota companies will be hurt by tariffs?

By the numbers:

An analysis from Minnesota accounting firm Schlenner, Wenner, and Co. expects some of Minnesota's biggest companies to get hit by the tariff battle.

The firm points out companies like 3M, Cargil, and Ecolab rely heavily on global trade flows.

"These companies manage worldwide operations and global supply chains, and any retaliation from other countries in the form of increased tariff rates on U.S. imports could significantly impact their businesses," the report states.

The report also points to potential increases down the line, if the tariffs were to remain in effect for the long term, to gas prices.

Impact on gas prices

By the numbers:

Minnesota is home to the largest oil refinery in the Midwest, Pine Bend Refinery in Rosemount and Inver Grove Heights. Pine Bend produces about half of the gas consumed in Minnesota and the Midwest and much of the jet fuel used at Minneapolis-St. Paul airport. The refinery receives the lion's share of its crude oil from Canada.

A GasBuddy estimate projected the Canadian tariffs could raise gas prices by about 30 cents per gallon and potentially as high as 70 cents. GasBuddy also expects the Midwest to be among the hardest hit regions for gas prices, if the tariffs remain in place.

Facilities like Pine Bend, which process the heavier grades of crude oil from Canada, won't be able to easily switch crude oil sources either without facility and equipment upgrades.

EconomyMinnesotaDonald J. TrumpBusinessWorld