Tariffs, Weaker Canada Trade Drive 14 Percent Q3 Drop In Minnesota Exports

MINNESOTA — Federally imposed tariffs and strained international trade relations are being blamed for a sharp drop in Minnesota exports in the third quarter of 2025 in a new report released by the Minnesota Department of Employment and Economic Development.

Exports of agricultural, mining, and manufactured goods totaled $5.7 billion from July through September, a 14 percent decline, or $964 million less, than during the same period in 2024.

State officials said the downturn was driven largely by a collapse in mineral fuel and oil exports to Canada, Minnesota’s largest trading partner and top export market for many products.

Minnesota exported about $16 million in mineral fuel and oil to Canada last quarter, down more than $500 million from the third quarter of 2024. Those exports primarily consist of refined products such as motor fuel.

"Mineral fuel and oil exports to Canada again had a significant impact on Minnesota’s exports in the third quarter," DEED Commissioner Matt Varilek said in a statement.

He added that federally imposed tariffs and strained international relations with traditional partners continue to weigh on Minnesota’s largest export markets.

Declines in other major product categories compounded the drop. Machinery exports fell 11 percent, while vehicle exports declined 20 percent.

Exports to Mexico and China, Minnesota’s second- and third-largest markets, also dropped by more than 20 percent each during the quarter.

Not all regions saw losses. Exports to Europe totaled $1.3 billion, an increase of 7 percent compared with a year earlier. Switzerland recorded a 46 percent increase, while exports to Turkey rose 60 percent. Gains were also reported in Italy, Germany, and the United Kingdom.

Minnesota companies also increased exports to the Middle East by 11 percent and to Africa by 6 percent.

Several product categories showed resilience despite the broader slowdown. Electrical equipment exports rose 2 percent, and aircraft and spacecraft exports increased 3 percent. Fertilizers posted a 39 percent gain, while exports of dairy, eggs, and honey jumped 69 percent. Miscellaneous edible preparations were up 46 percent.

“Our state’s international trade community has faced a tremendous level of uncertainty over the past year due to fluctuating tariff policies,” said Gabrielle Gerbaud, executive director of the Minnesota Trade Office. She said the office continues working to support Minnesota companies and strengthen relationships with international trade partners.

The full third-quarter 2025 export report is available on DEED’s website in the Export and Trade Statistics section.