WEBVTT 00:00.000 --> 00:21.160 The trade war with Canada is a gut punch to Wisconsin, given that our neighbor to the 00:21.160 --> 00:25.840 north is the state's largest international trading partner. 00:25.840 --> 00:32.380 Wisconsin exports about $7.5 billion worth of goods to Canada and imports about $5.7 00:32.380 --> 00:34.000 billion worth. 00:34.000 --> 00:39.560 We export things like machinery, agricultural products, including dairy, and forest products 00:39.560 --> 00:40.680 like paper. 00:40.680 --> 00:45.640 Our imports include wood pulp, oil, natural gas, and aluminum. 00:45.640 --> 00:50.760 Trade talks between the countries broke down when the U.S. imposed an additional 50% in 00:50.760 --> 00:55.560 tariffs on a range of Canadian goods, and that country in turn said it would impose 00:55.560 --> 00:59.060 matching tariffs starting just after Labor Day. 00:59.060 --> 01:05.040 For how this stacks up and what it means, we turn to CEO of the Wisconsin Economic Development 01:05.040 --> 01:07.160 Corporation, John Miller. 01:07.160 --> 01:09.080 And thanks very much for being here. 01:09.080 --> 01:10.640 Great, Erica. 01:10.640 --> 01:11.840 Thanks so much for having me. 01:11.840 --> 01:17.040 So where does this trade war with our largest export partner leave Wisconsin? 01:17.040 --> 01:22.960 Well, as you mentioned in your comments, Canada is Wisconsin's largest trading partner. 01:22.960 --> 01:30.600 So any unexpected changes to the current trade policy will lead to lots of uncertainty 01:30.600 --> 01:33.840 and frustration with Wisconsin businesses. 01:33.840 --> 01:38.600 And that'll obviously have a negative impact, not only on consumers who have to pay more 01:38.600 --> 01:43.440 for goods, but also businesses and other industries like agriculture that you mentioned 01:43.440 --> 01:49.200 that export their products and key and are the most key employers in our state. 01:49.200 --> 01:56.560 So according to the U.S. Census Bureau, exports from Wisconsin companies were down $687 million 01:56.560 --> 02:02.720 last year, and the disruptions contemplated in the discussions of the last week or so 02:02.720 --> 02:05.440 will cause that to increase. 02:05.440 --> 02:10.920 So and I should point out that that number, $687 million, is the lowest point we've had 02:10.920 --> 02:14.440 since COVID, and it's the second consecutive year of decline. 02:14.440 --> 02:16.680 So we're not trending in the right direction. 02:16.680 --> 02:21.760 And that obviously directly impacts the bottom line of our businesses and makes it harder 02:21.760 --> 02:23.560 to retain employees. 02:23.560 --> 02:30.800 How surprising was it for you to see Canada play hardball and impose these matching tariffs? 02:30.800 --> 02:37.280 Well, obviously on a state level, you know, we don't get to decide tariff policy nor do 02:37.280 --> 02:40.800 we get to influence our partners across the country. 02:40.800 --> 02:45.560 But it is concerning because businesses are – the businesses that I meet on a weekly 02:45.560 --> 02:53.040 basis are reporting to me that they are very, very concerned about the unpredictability 02:53.040 --> 02:56.160 of the changing landscape of tariff policy. 02:56.160 --> 03:01.320 And the way they say it is, just like it would be unfair and catech to change the rules in 03:01.320 --> 03:05.440 the middle of a sporting event, businesses depend on a level playing field. 03:05.440 --> 03:09.640 And also the certainty that the rules that they face today will be the same rules that 03:09.640 --> 03:11.640 they face tomorrow. 03:11.640 --> 03:18.440 So – and I come from the manufacturing sector, so I know how difficult it is to make plans 03:18.440 --> 03:22.520 at the best of times when things are going well and policy is consistent. 03:22.520 --> 03:28.280 But this constant rollercoaster of tariff policy makes it almost impossible for businesses 03:28.280 --> 03:31.080 to plan and effectively run their businesses. 03:31.080 --> 03:37.720 They need to focus on staffing levels and certify and place orders with suppliers. 03:37.720 --> 03:43.760 They also need to spend an extraordinary amount of time locating and training qualified distributors 03:43.760 --> 03:45.120 around the world. 03:45.120 --> 03:52.320 So any surprise in tariff policy from a trusted supplier or a critical foreign distributor 03:52.320 --> 03:57.040 in a country hit with a tariff can bring production to an absolute standstill. 03:57.040 --> 04:03.080 So replacing a supplier can take months and losing a foreign market can be devastating. 04:03.080 --> 04:08.080 I know it was for me when I focused a lot of my business on exports. 04:08.080 --> 04:13.440 So if one of those countries were no longer to bring in our product, that would hurt my 04:13.440 --> 04:16.440 bottom line and my ability to employ people. 04:16.440 --> 04:22.160 So these are the things that are really impacting Wisconsin companies as we go forward. 04:22.160 --> 04:26.920 And that's why the last year and a half has resulted in declining exports for Wisconsin 04:26.920 --> 04:27.840 companies. 04:27.840 --> 04:31.560 Our businesses just need clarity on what the rules of the world will be. 04:31.560 --> 04:35.280 What sector in Wisconsin will be hit the hardest in this? 04:35.280 --> 04:42.200 Well, clearly our exports to Canada, as you mentioned, are large, but they've been declining 04:42.200 --> 04:43.200 as well. 04:43.200 --> 04:48.880 So we saw an 8.6% decline, which is about $700 million in the last level. 04:48.880 --> 04:52.520 That's the lowest level of exports to Canada we've had since 2020. 04:52.520 --> 04:58.040 And just to prove that we aren't alone with Canada, our exports to Mexico have also declined 04:58.040 --> 05:00.040 by about 7.1%. 05:00.400 --> 05:05.600 In terms of some of the industries that you mentioned that might be hit, our top exports, 05:05.600 --> 05:08.920 as you mentioned, are industrial machinery. 05:08.920 --> 05:13.280 And in that category, our exports were down about 12% in 2025. 05:13.280 --> 05:18.840 So we export a lot of electrical machinery, various vehicle parts, sand, salt. 05:18.840 --> 05:24.000 We also are the largest, Canada is the largest recipient of agriculture goods from Wisconsin. 05:24.000 --> 05:30.360 So overall, the state of Wisconsin exported about $4 billion of ag products in 2025. 05:30.360 --> 05:33.840 And $1.4 billion of those went to Canada. 05:33.840 --> 05:38.600 So agriculture products are a huge factor for our local producers. 05:38.600 --> 05:45.640 Specific to that, even though Canada has a really tightly regulated dairy industry, how 05:45.640 --> 05:50.880 important are Wisconsin dairy exports to Canada? 05:50.880 --> 05:53.720 You know, that's a really great question. 05:53.720 --> 05:59.560 There's been a lot of talk about some of the really large tariffs that Canada has placed 05:59.560 --> 06:02.600 on Wisconsin dairy products. 06:02.600 --> 06:09.240 I worked on the Ways and Means Committee when I was a congressional staffer in the 90s. 06:09.240 --> 06:18.120 And that's when Canada imposed a 300% tariff on dairy products for U.S. companies. 06:18.120 --> 06:19.960 But it's been on the books for over 30 years. 06:19.960 --> 06:24.000 So the big difference there is that producers have had decades of consistency. 06:24.000 --> 06:29.280 So they know what the playing field is and they've had time to adjust their distribution 06:29.280 --> 06:30.280 channels. 06:30.280 --> 06:34.220 And according, interestingly, this is an interesting fact, according to the International Dairy 06:34.220 --> 06:39.040 Foods Association, the U.S. has really never even gotten close to hitting the threshold 06:39.040 --> 06:41.640 to receive that 300% tariff. 06:41.640 --> 06:48.720 So the Canadian government reports that about 99.9% of agriculture products that flow into 06:48.720 --> 06:53.240 Wisconsin, excuse me, flow into Canada, are not subject to that. 06:53.240 --> 07:02.120 So Wisconsin imports, excuse me, exports millions and millions of dollars of dairy products 07:02.120 --> 07:09.640 to Canada and ag products accounted for about 20% of Wisconsin's exports to Canada in 2025. 07:09.640 --> 07:14.360 So it is a big part of our export market. 07:14.360 --> 07:16.480 And it's not just dairy products. 07:16.480 --> 07:23.840 We do other agriculture products like prepared foods, beverages, wood products. 07:23.840 --> 07:30.560 And of course, you wouldn't be surprised that we also export a little summer sausage to them, 07:30.560 --> 07:31.560 too. 07:31.560 --> 07:36.960 But as far as dairy, whey, cheese and milk are the largest exports to Canada. 07:36.960 --> 07:43.840 What does this trade war mean for consumers, really drilling down to that level? 07:43.840 --> 07:49.400 Well, as I think we've seen in a lot of, at the grocery store in the last 18 months 07:49.400 --> 07:54.880 or so, we have heard lots of stories about products getting more expensive. 07:54.880 --> 08:00.600 And so Canada is bringing, as our other countries, bringing products into the U.S. that are going 08:00.600 --> 08:04.960 to be tariff, which means that they're going to have an impact on what consumers pay at 08:04.960 --> 08:06.120 the grocery store. 08:06.120 --> 08:10.000 But I think the bigger factor here is that Wisconsin is a producer. 08:10.000 --> 08:16.360 We produce not only machinery through our factories, but we produce products, dairy products 08:16.360 --> 08:19.040 and other things that go outside of the country. 08:19.040 --> 08:27.840 So when those products are limited in their distribution, our workers will have to potentially 08:27.840 --> 08:35.680 suffer not having a job if they can't have a reasonable place to sell their products. 08:35.680 --> 08:37.920 So it goes both ways. 08:37.920 --> 08:43.240 It's the price we pay for products, but it's also the ability for our workers to earn money 08:43.240 --> 08:45.160 producing those products. 08:45.160 --> 08:51.920 Could in the long run the imposition of U.S. tariffs deliver more markets to us and productivity 08:51.920 --> 08:54.920 here? 08:54.920 --> 08:55.920 I don't know. 08:55.920 --> 08:56.920 I would say no. 08:56.920 --> 09:02.920 And the reason why I would say no is that, as I mentioned, I ran an agriculture equipment 09:02.920 --> 09:05.080 manufacturing company. 09:05.080 --> 09:08.800 Half of our sales were outside the United States, and we exported to Canada, which was 09:08.800 --> 09:10.440 one, which had no tariffs. 09:10.440 --> 09:16.360 We also exported to Ukraine and Russia and Kazakhstan and South Africa and Australia 09:16.360 --> 09:21.560 and a number of countries that didn't limit our products going in. 09:21.560 --> 09:26.640 And so that allowed me to employ hundreds of people in Manitowoc, Wisconsin, to produce 09:26.640 --> 09:27.920 those products. 09:27.920 --> 09:35.760 So the theory that if we tariff some products coming in that we will do better by our local 09:35.760 --> 09:40.640 industries is also fairly moot because I was also buying a lot of steel. 09:40.640 --> 09:46.200 And if we're only going to limit that production to U.S. steel manufacturers, the price of steel 09:46.200 --> 09:47.200 would go up. 09:47.200 --> 09:52.760 So, therefore, my product that I was using steel to produce was going to go up as well, 09:52.760 --> 09:57.520 which again is something that hurts consumers not only in the United States, but around 09:57.520 --> 09:58.520 the world. 09:58.520 --> 10:04.560 So the Trump administration, this is kind of on an adjacent matter, worked to soften the 10:04.560 --> 10:11.480 blow of inflation by importing beef and then selling it at a discount. 10:11.480 --> 10:15.720 That proves to be not popular with farmers. 10:15.720 --> 10:19.520 But what do you make of that kind of market manipulation? 10:19.520 --> 10:26.160 I think it's distressing, it's a solution to a problem that doesn't exist. 10:26.160 --> 10:30.560 We have plenty of beef producers here in Wisconsin, we have plenty in the United States that 10:30.560 --> 10:36.680 can produce enough beef for our consumption and also then have enough extra to export. 10:36.680 --> 10:43.920 So any time you bring in a cheap product here, that may satiate some local demand, but what 10:43.920 --> 10:49.840 it then does is it makes it difficult for our producers to then sell their product overseas 10:49.840 --> 10:50.840 as well. 10:50.840 --> 10:59.600 So, it may help for a short period of time, an American consumer at the grocery store. 10:59.600 --> 11:03.800 But there are plenty of beef producers here in Wisconsin that are going to suffer because 11:03.800 --> 11:07.360 a lot of their products go outside of our borders. 11:07.360 --> 11:13.160 As to this Canada U.S. trade war that we are in the midst of right now, do you suspect 11:13.160 --> 11:16.120 it will resolve soon? 11:16.120 --> 11:21.800 I can certainly hope so because we're feeling the effects right here at the WEDC. 11:21.800 --> 11:28.360 For example, we host trade missions, it's part of the mission of the WEDC and we typically 11:28.360 --> 11:33.160 host a trade mission with Canada and with Mexico every year because there are largest trading 11:33.160 --> 11:34.160 partners. 11:34.160 --> 11:40.920 And we had last year two separate trade missions scheduled with Canada and we have Wisconsin 11:40.920 --> 11:45.200 companies that we bring along to help them sell their goods in Canada. 11:45.200 --> 11:50.400 But we learned from our Canadian counterparts across the border that they were reluctant 11:50.400 --> 11:57.200 to engage and meet with our producers because they were concerned about the changing nature 11:57.200 --> 11:58.200 of tariffs. 11:58.200 --> 12:01.840 So we actually had to cancel that trade mission. 12:01.840 --> 12:07.000 And so we tried again in November, again, we got the same response. 12:07.000 --> 12:10.360 But we at the WEDC will remain undeterred. 12:10.360 --> 12:13.520 We decide that we take a different, very local approach. 12:13.520 --> 12:16.960 So we meet with state-by-state relationships in other countries. 12:16.960 --> 12:22.840 So our goal is to meet with officials inside of Canada provinces to see if we can continue 12:22.840 --> 12:26.680 to forge paths going forward because administrations will come and go. 12:26.680 --> 12:31.080 But our Wisconsin's relationship with Canada, just like the relationship that the U.S. has 12:31.080 --> 12:34.280 with Canada, has been in existence for hundreds of years. 12:34.280 --> 12:36.320 It's going to be in existence for a hundred more. 12:36.320 --> 12:39.520 So we really need to do our best to keep those relationships positive. 12:40.160 --> 12:41.160 All right. 12:41.160 --> 12:42.160 We leave it there. 12:42.160 --> 12:43.160 John Miller. 12:43.160 --> 12:44.160 Thanks so much. 12:44.160 --> 12:45.160 Thanks for having me. 12:45.160 --> 12:49.640 I appreciate it. 12:49.640 --> 12:55.240 That was, that was really, I went really long with that and I appreciate your indulgence. 12:55.240 --> 12:56.240 No problem. 12:56.240 --> 12:57.240 Yeah. 12:57.240 --> 12:58.240 I'm happy to do it. 12:58.240 --> 12:59.240 All right. 12:59.240 --> 13:00.240 Well, thank you. 13:00.240 --> 13:01.920 Enjoy the weekend. 13:01.920 --> 13:02.920 If you don't have to work. 13:02.920 --> 13:03.920 I will do so. 13:03.920 --> 13:04.920 You too. 13:04.920 --> 13:05.920 Well, you never know. 13:05.920 --> 13:06.920 Thank you. 13:06.920 --> 13:07.920 Thank you. 13:07.920 --> 13:08.920 Bye. 13:08.920 --> 13:09.920 Bye.