Minnesota Exports to China Down 9 Percent in 2019

Minnesota Exports to China Down 9 Percent in 2019

The state’s total exports fell 2 percent between 2018 and 2019.

Minnesota’s exports dropped 2 percent between 2018 and 2019, with a 5 percent drop in exports to Asia driving much of the decline, according to a state report released Monday.

The total exports of $22.2 billion dropped from the $22.7 billion of 2018, with Minnesota dropping from 20th to 21st in its ranking for the amount of exports. The drop comes with the United States’ exports dropping by 1 percent in 2019 as well, according to the Minnesota Department of Employment and Economic Development.

“Disruptive U.S. trade tariffs, foreign countermeasures and uncertain trade policies impacted trade in 2019,” the report said.

The report noted that exports to China, one of the state’s top five export markets, dropped 9 percent by $243 million, with exports to China totalling $2.7 billion.

“While China was a big factor, there were other Asian countries that decreased demand as well,” said DEED senior research analyst Thu-Mai Ho-Kim.

For instance, there was a 3 percent drop in South Korea, a 6 percent drop in Singapore, a 9 percent drop in the Philippines, and a 26 percent drop in Taiwan. While South Korea and Singapore are among Minnesota’s top ten major export countries, Taiwan comes in at 16th and the Philippines at 14th.

“Minnesota’s top regions are Asia, North America, and the European Union, and the exports to the European Union and North America were pretty flat. And so Asia, was in that sense, driving that 2 percent decline,” Ho-Kim said.

At the same time, Mexico, Japan, and Germany—which rank among Minnesota’s top 10 export markets—saw an increase, while exports to Canada, the state’s largest market at $4.7 billion in 2019, saw a 2 percent drop.

“It was more than just Asia,” Ho-Kim said. “But we try to include the bigger areas or the bigger markets that may have more of a role in moving the needle.”

Optics and medical products, the state’s largest export product category, grew 2 percent. But Minnesota’s other top five categories went down. Machinery (-3 percent), electrical equipment (-6 percent), plastics (-8 percent), and vehicles (-7 percent) all saw a decline in 2019. Other smaller industry categories saw increases: Pharmaceuticals; mineral fuels and oils; wood pulp; albumins, starch, and glue; and cereals all increased exports last year.

DEED also notes that Minnesota exports in 2018 were up 10 percent from 2017, and 2017 exports were up 8 percent from 2016. The numbers send a mixed message, a DEED spokesperson said: The overall drop isn’t good, but it’s not bad.

“International exports are a critically important part of Minnesota’s economy, accounting for billions of dollars in revenue and thousands of jobs,” DEED Commissioner Steve Grove said in a press release.