The trade war with Canada is a gut punch to Wisconsin, given that our neighbor to the
north is the state's largest international trading partner.
Wisconsin exports about $7.5 billion worth of goods to Canada and imports about $5.7
billion worth.
We export things like machinery, agricultural products, including dairy, and forest products
like paper.
Our imports include wood pulp, oil, natural gas, and aluminum.
Trade talks between the countries broke down when the U.S. imposed an additional 50% in
tariffs on a range of Canadian goods, and that country in turn said it would impose
matching tariffs starting just after Labor Day.
For how this stacks up and what it means, we turn to CEO of the Wisconsin Economic Development
Corporation, John Miller.
And thanks very much for being here.
Great, Erica.
Thanks so much for having me.
So where does this trade war with our largest export partner leave Wisconsin?
Well, as you mentioned in your comments, Canada is Wisconsin's largest trading partner.
So any unexpected changes to the current trade policy will lead to lots of uncertainty
and frustration with Wisconsin businesses.
And that'll obviously have a negative impact, not only on consumers who have to pay more
for goods, but also businesses and other industries like agriculture that you mentioned
that export their products and key and are the most key employers in our state.
So according to the U.S. Census Bureau, exports from Wisconsin companies were down $687 million
last year, and the disruptions contemplated in the discussions of the last week or so
will cause that to increase.
So and I should point out that that number, $687 million, is the lowest point we've had
since COVID, and it's the second consecutive year of decline.
So we're not trending in the right direction.
And that obviously directly impacts the bottom line of our businesses and makes it harder
to retain employees.
How surprising was it for you to see Canada play hardball and impose these matching tariffs?
Well, obviously on a state level, you know, we don't get to decide tariff policy nor do
we get to influence our partners across the country.
But it is concerning because businesses are – the businesses that I meet on a weekly
basis are reporting to me that they are very, very concerned about the unpredictability
of the changing landscape of tariff policy.
And the way they say it is, just like it would be unfair and catech to change the rules in
the middle of a sporting event, businesses depend on a level playing field.
And also the certainty that the rules that they face today will be the same rules that
they face tomorrow.
So – and I come from the manufacturing sector, so I know how difficult it is to make plans
at the best of times when things are going well and policy is consistent.
But this constant rollercoaster of tariff policy makes it almost impossible for businesses
to plan and effectively run their businesses.
They need to focus on staffing levels and certify and place orders with suppliers.
They also need to spend an extraordinary amount of time locating and training qualified distributors
around the world.
So any surprise in tariff policy from a trusted supplier or a critical foreign distributor
in a country hit with a tariff can bring production to an absolute standstill.
So replacing a supplier can take months and losing a foreign market can be devastating.
I know it was for me when I focused a lot of my business on exports.
So if one of those countries were no longer to bring in our product, that would hurt my
bottom line and my ability to employ people.
So these are the things that are really impacting Wisconsin companies as we go forward.
And that's why the last year and a half has resulted in declining exports for Wisconsin
companies.
Our businesses just need clarity on what the rules of the world will be.
What sector in Wisconsin will be hit the hardest in this?
Well, clearly our exports to Canada, as you mentioned, are large, but they've been declining
as well.
So we saw an 8.6% decline, which is about $700 million in the last level.
That's the lowest level of exports to Canada we've had since 2020.
And just to prove that we aren't alone with Canada, our exports to Mexico have also declined
by about 7.1%.
In terms of some of the industries that you mentioned that might be hit, our top exports,
as you mentioned, are industrial machinery.
And in that category, our exports were down about 12% in 2025.
So we export a lot of electrical machinery, various vehicle parts, sand, salt.
We also are the largest, Canada is the largest recipient of agriculture goods from Wisconsin.
So overall, the state of Wisconsin exported about $4 billion of ag products in 2025.
And $1.4 billion of those went to Canada.
So agriculture products are a huge factor for our local producers.
Specific to that, even though Canada has a really tightly regulated dairy industry, how
important are Wisconsin dairy exports to Canada?
You know, that's a really great question.
There's been a lot of talk about some of the really large tariffs that Canada has placed
on Wisconsin dairy products.
I worked on the Ways and Means Committee when I was a congressional staffer in the 90s.
And that's when Canada imposed a 300% tariff on dairy products for U.S. companies.
But it's been on the books for over 30 years.
So the big difference there is that producers have had decades of consistency.
So they know what the playing field is and they've had time to adjust their distribution
channels.
And according, interestingly, this is an interesting fact, according to the International Dairy
Foods Association, the U.S. has really never even gotten close to hitting the threshold
to receive that 300% tariff.
So the Canadian government reports that about 99.9% of agriculture products that flow into
Wisconsin, excuse me, flow into Canada, are not subject to that.
So Wisconsin imports, excuse me, exports millions and millions of dollars of dairy products
to Canada and ag products accounted for about 20% of Wisconsin's exports to Canada in 2025.
So it is a big part of our export market.
And it's not just dairy products.
We do other agriculture products like prepared foods, beverages, wood products.
And of course, you wouldn't be surprised that we also export a little summer sausage to them,
too.
But as far as dairy, whey, cheese and milk are the largest exports to Canada.
What does this trade war mean for consumers, really drilling down to that level?
Well, as I think we've seen in a lot of, at the grocery store in the last 18 months
or so, we have heard lots of stories about products getting more expensive.
And so Canada is bringing, as our other countries, bringing products into the U.S. that are going
to be tariff, which means that they're going to have an impact on what consumers pay at
the grocery store.
But I think the bigger factor here is that Wisconsin is a producer.
We produce not only machinery through our factories, but we produce products, dairy products
and other things that go outside of the country.
So when those products are limited in their distribution, our workers will have to potentially
suffer not having a job if they can't have a reasonable place to sell their products.
So it goes both ways.
It's the price we pay for products, but it's also the ability for our workers to earn money
producing those products.
Could in the long run the imposition of U.S. tariffs deliver more markets to us and productivity
here?
I don't know.
I would say no.
And the reason why I would say no is that, as I mentioned, I ran an agriculture equipment
manufacturing company.
Half of our sales were outside the United States, and we exported to Canada, which was
one, which had no tariffs.
We also exported to Ukraine and Russia and Kazakhstan and South Africa and Australia
and a number of countries that didn't limit our products going in.
And so that allowed me to employ hundreds of people in Manitowoc, Wisconsin, to produce
those products.
So the theory that if we tariff some products coming in that we will do better by our local
industries is also fairly moot because I was also buying a lot of steel.
And if we're only going to limit that production to U.S. steel manufacturers, the price of steel
would go up.
So, therefore, my product that I was using steel to produce was going to go up as well,
which again is something that hurts consumers not only in the United States, but around
the world.
So the Trump administration, this is kind of on an adjacent matter, worked to soften the
blow of inflation by importing beef and then selling it at a discount.
That proves to be not popular with farmers.
But what do you make of that kind of market manipulation?
I think it's distressing, it's a solution to a problem that doesn't exist.
We have plenty of beef producers here in Wisconsin, we have plenty in the United States that
can produce enough beef for our consumption and also then have enough extra to export.
So any time you bring in a cheap product here, that may satiate some local demand, but what
it then does is it makes it difficult for our producers to then sell their product overseas
as well.
So, it may help for a short period of time, an American consumer at the grocery store.
But there are plenty of beef producers here in Wisconsin that are going to suffer because
a lot of their products go outside of our borders.
As to this Canada U.S. trade war that we are in the midst of right now, do you suspect
it will resolve soon?
I can certainly hope so because we're feeling the effects right here at the WEDC.
For example, we host trade missions, it's part of the mission of the WEDC and we typically
host a trade mission with Canada and with Mexico every year because there are largest trading
partners.
And we had last year two separate trade missions scheduled with Canada and we have Wisconsin
companies that we bring along to help them sell their goods in Canada.
But we learned from our Canadian counterparts across the border that they were reluctant
to engage and meet with our producers because they were concerned about the changing nature
of tariffs.
So we actually had to cancel that trade mission.
And so we tried again in November, again, we got the same response.
But we at the WEDC will remain undeterred.
We decide that we take a different, very local approach.
So we meet with state-by-state relationships in other countries.
So our goal is to meet with officials inside of Canada provinces to see if we can continue
to forge paths going forward because administrations will come and go.
But our Wisconsin's relationship with Canada, just like the relationship that the U.S. has
with Canada, has been in existence for hundreds of years.
It's going to be in existence for a hundred more.
So we really need to do our best to keep those relationships positive.
All right.
We leave it there.
John Miller.
Thanks so much.
Thanks for having me.
I appreciate it.
That was, that was really, I went really long with that and I appreciate your indulgence.
No problem.
Yeah.
I'm happy to do it.
All right.
Well, thank you.
Enjoy the weekend.
If you don't have to work.
I will do so.
You too.
Well, you never know.
Thank you.
Thank you.
Bye.
Bye.