Minnesota loses manufacturing jobs as Trump’s trade war persists

Minnesota manufacturers posted job losses in June, mirroring a national decline in the industry President Donald Trump’s trade war is meant to eventually boost.

While some fluctuation is normal in manufacturing, the reported losses come amid a broader economic downturn and renewed tariff threats against major U.S. trading partners. Trump has said import taxes as high as 50% could go into effect Aug. 1.

“Manufacturing is a space that is very sensitive to tariff impacts, both in terms of final goods that Minnesota companies are seeking to sell but also supply chain disruptions — getting parts that you need for machinery or that become part of your final finished goods,” said Matt Varilek, commissioner of Minnesota’s Department of Employment and Economic Development (DEED). “That all can be disrupted by the very rapidly evolving international trade system.”

Manufacturing lost more jobs than any other sector last month, according to DEED data released Thursday, a 0.5% month-over-month decline of 1,700 jobs. Overall, the state’s job market stayed mostly flat, losing 800 jobs across sectors.

A slowdown in the global economy has squeezed U.S. manufacturing for more than a year, resulting in tens of thousands of lost jobs, said Creighton University economics professor Ernie Goss. The on-again, off-again trade war has only added to the pressure.

“Obviously, in the global economy, tariffs matter,” Goss said. “The volatility and the uncertainty surrounding tariffs … makes decision-makers sort of hold. You cannot make decisions.”

Creighton’s Mid-America Business Conditions Index — which measures economic conditions in nine states, including Minnesota — this month cited federal data showing the region lost 9,900 manufacturing jobs year-over-year in June, and the U.S. lost 88,000. Federal data also shows exports in the first four months of 2025 dropped across the region, with a more than 8% decline in Minnesota.

Supply managers said they’re worried tariffs will increase inflation, according to the index, and expect input prices to rise an average 7.5% this year.

Inflation rose 2.7% year-over-year in June, up from a 2.4% increase in May, according to consumer price index (CPI) data the U.S. Bureau of Labor Statistics released Tuesday.

The impact of tariffs on prices has taken time to show up in the data, in part because U.S. companies stockpiled merchandise as the trade war brewed.

“Inventories are one of many reasons why inflation has been relatively muted in the early stages of the ongoing tariff shock,” Bernard Yaros, lead U.S. economist at Oxford Economics, said in a statement Thursday. “As inventory buffers wear out, though, the passthrough from higher customs duties to consumer prices will become even more apparent in the price statistics.”

Twin City Die Castings manufactures metal components at factories in Minneapolis, Monticello and Watertown, S.D. It froze hiring and terminated 10 contract workers earlier this year as sales slowed and costs grew. The company has recently been able to hire again, CEO Todd Olson said, but tariff uncertainty continues to hurt.

“My No. 1 concern out there is getting clarity on tariffs,” Olson said. “People are not going to resource back to the U.S. until they know tariff rates throughout the world.”

The trade war’s stated goal is reshoring American manufacturing, a process that will likely take years. Olson said he’d like to see that happen.

“We’re hopeful, we really are, that the tariffs are going to help,” he said. “But right now, I can’t say they have.”