Minnesota’s global exports rebounded strongly in the second quarter of 2026, climbing 14% year over year to $6.6 billion, according to new trade figures released by the Minnesota Department of Employment and Economic Development (DEED).
DEED Commissioner Matt Varilek attributed part of the quarterly recovery to reduced regulatory friction following a significant federal legal ruling on tariffs earlier in the year. “We’re happy to see a healthy rebound in Minnesota’s second-quarter exports. Businesses may have seen some relief from the U.S. Supreme Court’s mid-February ruling that tariffs applied last year under the International Emergency Economic Powers Act were not legal,” Varilek said.
The $800 million surge in agricultural, mining, and manufactured shipments spanning April through June was propelled by gains across key international markets, particularly in North America, Europe, and Asia. State trade officials pointed to high-volume growth in top export categories—including medical devices, electronics, machinery, and agricultural products—as a key driver.
Despite the strong numbers, Varilek signaled concern about new federal trade actions directed at Canada, initiated last month under an unprecedented legal framework.
The Trump administration is invoking Section 338 of the Tariff Act of 1930 (better known as part of the Smoot-Hawley Tariff Act). Section 338 specifically grants the president sweeping authority to impose new tariffs of up to 50%—or even ban imports entirely—on any foreign country the administration determines is “discriminating” against U.S. commerce. Although Section 338 has been law for nearly a century, it has never been formally invoked to impose tariffs until now. Unlike typical trade authorities, Section 338 lets the executive declare discriminatory “facts” without first requiring an exhaustive investigation by the U.S. International Trade Commission or honoring CUSMA/USMCA tariff-free origin rules. The administration invoked Section 338 after accusing Ottawa of discriminating against American agriculture (specifically dairy limits), alcohol exports, and motor vehicles—and retaliating against previous U.S. duties.
The action placed a 50% tariff on roughly $20 billion to $27 billion worth of Canadian imports (including machinery, electronics, building materials, and agricultural goods), prompting Canada to issue dollar-for-dollar counter-tariffs on U.S. products.
“Now we are deeply concerned about the federal government’s escalating tariff situation with Canada, which began last month with the application of a Depression Era law that had never previously been used,” Varilek noted. “Canada is Minnesota’s largest trading partner, and we are working to maintain a positive relationship with our neighbors to the north.”
The Clinton-era NAFTA treaty was renegotiated and replaced in 2020 as the United States-Mexico-Canada Agreement (USMCA)—referred to in Canada as CUSMA. While the USMCA preserved NAFTA’s core objective of so-called free trade for qualifying goods across North America, it introduced overhauled internal provisions regarding tariffs, dispute settlement, and emergency carve-outs. Unlike NAFTA, which had no expiration date, USMCA includes a 16-year sunset clause with a mandatory joint review every six years.
In 2024, Minnesota had a record $27.1 billion in total global exports of manufactured, agricultural, and mining products. Canada is consistently Minnesota’s primary foreign trading partner, accounting for roughly a third of the state’s total international exports.
