With trade war pause, Minnesota firms rush to place orders from China, remaining wary of what’s next

WASHINGTON - Minnesotan businesses and farmers expressed relief Monday over the temporary pause in the trade war between the U.S. and China, with some small firms working to get their products onto ships as soon as possible.

U.S. and Chinese negotiators in Geneva, Switzerland, worked out a deal over the weekend that would lower 145% tariffs on most Chinese goods to 30%, and also lower China’s retaliatory tariffs to 10%.

Without certainty about what comes next, John Nephew, president of Proctor-based Atlas Games, said the company will bring the entire print run of its Catstronauts board game on the next available ship.

The game might end up costing more, perhaps a third more. “That’s painful but not a total deal-stopper the way 145% is,” Nephew said.

He’s also working to get other games printed and shipped during the 90-day window, but the continued uncertainty surrounding the permanent tariff situation continues to force him to think short-term.

Beth Benike, owner of Zumbrota-based Busy Baby, maker of suction-cupped mats and tethered toys, said her products still sit in a Chinese warehouse. She said she now has “three months of runway” to figure out if her business survives.

“Thirty percent is still insane for us,” Benike said of the latest tariff. A shipment would still cost $48,000 more than before the escalation and will affect the long-term health of her company.

“I don’t want to come off as ungrateful,” she said. “But it’s still a kick in the butt for my business.”

Across Greater Minnesota, the news was most welcome in farm fields, where producers were planting soybeans. Soybeans, a staple for livestock diets, is the state’s largest export, and China is the largest destination.

“Am I glad to hear it? Absolutely,” said Dan Glessing, a Wright County dairy farmer and president of the Minnesota Farm Bureau. “Now if the bean market would jump a little more than 8 cents.”

The stock markets in the U.S. surged Monday, with the Dow Jones industrial average up over 1,100 points. Commodity markets also rose, though modestly.

“It’s fantastic news to know that we are hopefully moving toward potential agreements,” said Darin Johnson, who farms south of Wells and is president of the Minnesota Soybean Growers Association. “But I think there’s still a lot of ambiguity there.”

China also is key to Minnesota manufacturers, which depend on companies there for parts and raw materials that are unavailable or too expensive to source elsewhere. Bob Kill, CEO of consultant Enterprise Minnesota, said he’d heard from companies Monday that were optimistic about the progress made.

“It’s imperative this settles down so we can get back to strategic and operational planning,” Kill said.

Reactions on Capitol Hill were predictably mixed. Rep. Tom Emmer, the central Minnesota Republican who serves as majority whip in the U.S. House, called the successful negotiations a “promise kept.”

“President Trump and his team have worked hard to level the playing field ... especially with trading partners that have long taken advantage of the United States,” Emmer said on X, formerly Twitter, after the news brok

Meanwhile, Sen. Tina Smith, the Democrat from Minnesota, called the tariff campaign a “charade.”

“This is Trump caving to China and desperately trying to clean up a mess of his own making while pretending to claim victory,” said Smith in a statement.

The tariffs had rattled farmers, consumers and manufacturers alike. Even proponents of the tax cuts favored by President Donald Trump expressed skepticism about the massive levies against China and of tariffs on close trading partners Canada and Mexico.

Matthew Shay, president and CEO of the National Retail Federation, which lobbies for many retailers including Minneapolis-based Target, called the pause “a critical first step to provide some short-term relief for retailers and other businesses that are in the midst of ordering merchandise for the winter holiday season.”

Shay urged continued discussions, calling for “long-term stability between the two largest global economies.”

My Cable Mart owner Neil Marriott said he also continues to worry about his long-term costs, but the temporary tariff decrease “will help” the Eden Prairie company.

A container of cables and TV mounts arrived Monday from China in the Seattle port. It will be processed by customs and he’ll get a bill that he’ll have to pay in three days.

He was expecting a $230,000 bill, and had to scramble to get a loan to cover that sudden cost hike. Now, he expects the bill will drop to about $50,000.

“It’s still a huge bill, but it’s significantly less,” he said.

Marriott still will search for new suppliers in India, Vietnam, South Korea and elsewhere, Marriott said.

At a roundtable in Forest Lake Friday organized by Rep. Pete Stauber, Steve Whitaker, co-owner of Whitaker GMC in the city about 30 miles north of Minneapolis, said with the tariffs, it would “be tough for us to grow at all.”

Stauber, a Republican who represents northeastern Minnesota, said he has seen good come from tariffs. For example, steel tariffs enacted during the first Trump administration and continued under President Joe Biden, were instrumental in helping the Iron Range.

“China was steel dumping through third world countries and into the United States,” Stauber said.

But Wyoming co-owner Traci Tapani said the trade war escalation with China has been worrisome.

Last week, two customers warned their business could slow because they export 30% to 40% of their machines to China and had been facing a 145% reciprocal tariffs. That was expected to hurt machine sales and future parts orders from Wyoming.

With Monday’s news from the White House, Tapani said she was “happy to hear there is a de-escalation with China. Any tariff reduction is a positive development.”

But she also said her company will need to take a “wait-and-see” approach in the coming weeks.

“The lack of certainty over tariffs and resulting costs continues to be a problem,” she said. “A temporary pause is good, but it still leaves us not knowing what comes next and when it will happen.”

Includes reporting by Star Tribune staff writers Carson Harzog, Brooks Johnson and Dee DePass.